How is the value of the Dog Haus Restaurants determined when the Franchisor exercises the 'Take-Along Right'?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.1.2 Upon the occurrence of a Capital Event, Franchisor shall have the right (the "Take-Along Right") to compel Area Developer to sell and, in such event, Area Developer shall sell the assets of any or all of the Dog Haus Restaurants, regardless of whether such Dog Haus Restaurants are under construction or are Open and operating (collectively the "Take-Along Assets") at the same value attributable to Dog Haus Restaurants owned and operated by Franchisor or its Affiliates at the closing of a Capital Event.
Franchisor shall exercise this Take-Along Right to compel the sale of the Take-Along Assets by Area Developer by providing Area Developer with written notice (the "Take-Along Notice") setting forth the time and place of the closing of the Capital Event, which time and place shall not be less than thirty (30) days after the date of the Take-Along Notice, and the expected price and form of consideration to be paid for the Take-Along Assets at the closing.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the 'Take-Along Right' allows Dog Haus to compel an Area Developer to sell the assets of their Dog Haus Restaurants during a Capital Event. The value of these restaurants is determined by the value attributable to Dog Haus Restaurants owned and operated by the franchisor or its affiliates at the closing of a Capital Event. This applies whether the restaurants are under construction or already open and operating.
Dog Haus must provide the Area Developer with a written 'Take-Along Notice' at least thirty days before the closing of the Capital Event. This notice will include the time and place of the closing, as well as the expected price and form of consideration for the assets.
For a prospective franchisee, this means that if Dog Haus experiences a Capital Event, they could force the Area Developer to sell their restaurants at a value equivalent to the franchisor's own restaurants. This could be beneficial if the franchisor's restaurants are valued highly, but it could be detrimental if the franchisor's restaurants are valued lower than the franchisee's. It is important for potential franchisees to understand the conditions under which this 'Take-Along Right' can be exercised and how the valuation will be determined, as it could significantly impact their investment.