Under what circumstances does Dog Haus have the option to purchase an Area Developer's business?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section In Area Development Agreement (Exhibit B) | Summary |
|---|---|---|
| n. Franchisor's right of first | Section 9.3 | We may match any offer to purchase your business. |
| refusal to acquire Area | ||
| Developer's business | ||
| o. Franchisor's option to purchase Area Developer's business | 9.1 | We may sell our assets, the Dog Haus Marks or the Dog Haus System, may sell securities in a public offering or in a private placement, may merge, acquire other corporations, or be acquired by another corporation, and may undertake a refinancing, recapitalization, leveraged buy-out, or other economic or financial restructuring (each a "Capital Event") all without your consent or approval by you. Upon the occurrence of a Capital Event, we have the right to compel you to sell to us the assets of all your Dog Haus Restaurants, whether or not they are open or under construction. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 63–72)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, Dog Haus has the option to purchase an Area Developer's business under specific circumstances related to significant corporate events. Specifically, Dog Haus may undertake what the agreement terms a 'Capital Event' without the Area Developer's consent or approval.
A 'Capital Event' includes scenarios such as Dog Haus selling its assets, the Dog Haus Marks, or the Dog Haus System. It also encompasses selling securities through a public offering or private placement. Mergers, acquisitions by other corporations, or being acquired by another corporation also qualify as Capital Events. Furthermore, any refinancing, recapitalization, leveraged buy-out, or other economic or financial restructuring is included.
Upon the occurrence of any of these Capital Events, Dog Haus has the right to compel the Area Developer to sell the assets of all their Dog Haus Restaurants to Dog Haus. This includes restaurants that are already open and those still under construction. This provision gives Dog Haus significant control during major corporate changes, allowing them to consolidate and restructure their franchise network as needed.