Besides the assets, what else must be transferred to the buyer when selling a HydroDog franchise?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
roDog Business franchisees. In addition to examining the qualifications of the proposed transferee and other factors we deem relevant, in deciding whether to approve a transfer, we may also consider the length of time your HydroDog Business has been opened and whether transferring the location at the current time is in the best interest of the System. A transfer of ownership, possession or control of your HydroDog Business may be made only in conjunction with a transfer of this Agreement. If the transfer is of this Agreement or a controlling interest in you, or is one of a series of transfers which in the aggregate constitute the transfer of this Agreement or a controlling interest in you, all of the following conditions must be met prior to or concurrently with the effective date of the transfer:
- (a) the transferee has sufficient business experience, aptitude and financial resources to operate your HydroDog Business;
- (b) you have paid all Royalties, Marketing Fund Fees, contributions, amounts owed for purchases from us and all other amounts owed to us or to third-party creditors and have submitted all required reports and statements;
- (c) the transferee (or its owners) have agreed to complete our standard training program;
- (d) the transferee has agreed to be bound by, and assume, all of the terms and conditions of the Lease or enter into a new one for the remainder of the Lease term as approved by the lessor;
- (e) the transferee has signed our then-current franchise agreement;
- (f) subject to state law, you have paid to us a transfer fee of twenty thousand dollars ($20,000) per Territory sold;
- (g) if applicable, you have paid to us, or the respective third-party broker, any and all commissions or other fees due;
- (h) you (and your transferring owners) have executed a general release, in form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees and agents;
- (i) we have approved the material terms and conditions of such transfer and determined that the price and terms of payment will not adversely affect the transferee's operation of your HydroDog Business;
- (j) if you or your owners finance any part of the sale price of the transferred interest, you and/or your owners have agreed that all of the transferee's obligations pursuant to any promissory notes, agreements or security interests that you or your owners have reserved in your HydroDog Business are subordinate to the transferee's obligation to pay Royalties, Marketing Fund Fees, contributions and other amounts due to us, and you must execute a subordination agreement in a form satisfactory to us evidencing such subordination and otherwise to comply with this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, a transfer of ownership, possession, or control of your HydroDog Business can only occur alongside a transfer of the Franchise Agreement itself. If transferring the agreement or a controlling interest, several conditions must be met both before and during the transfer.
Specifically, the individual taking over the Hydrodog franchise must demonstrate sufficient business experience, aptitude, and financial resources to effectively manage the business. The transferee needs to agree to complete Hydrodog's standard training program. The transferee must also agree to adhere to all terms and conditions of the existing lease or secure a new lease agreement approved by the lessor. The transferee is required to sign Hydrodog's then-current franchise agreement.
Additionally, the selling franchisee must meet certain obligations. All outstanding royalties, marketing fund fees, amounts owed for purchases, and any other debts to Hydrodog or third-party creditors must be settled. All required reports and statements must be submitted. Subject to state law, the seller must pay Hydrodog a transfer fee of $20,000 per territory sold. The seller must also execute a general release of any claims against Hydrodog and its affiliates, and, if applicable, pay any commissions or fees due to third-party brokers. Furthermore, if the seller finances any part of the sale, those obligations must be subordinate to the transferee's obligations to pay royalties and fees to Hydrodog. Finally, subject to state law, the seller must execute a non-competition covenant in favor of Hydrodog and the transferee, agreeing to be bound by the post-term competitive restrictions outlined in the Franchise Agreement, starting from the transfer date.