Can Hydrodog change, modify, increase, or decrease the mark-up/profit margins on sales to franchisees at any time?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
We will provide you with a list, that we may modify from time-to-time, in our Business Judgment, of approved manufacturers, suppliers, or distributors of Operating Assets and Business Materials.
We may designate approved or designated suppliers, providers, distributors, or manufacturers for any types, models or brands of business materials, inventory, Operating Assets, and other equipment and business services that we approve for the HydroDog Businesses or which we designate in the Manuals as relating to the establishment or operation of the HydroDog Business, which may include us or our affiliates as one of, or the only approved or designated supplier for certain items or services (the "Approved Suppliers").
You can only purchase materials and inventory for your HydroDog Business from Approved Suppliers.
Purchasing materials and inventory from suppliers that are not Approved Suppliers is grounds for default and/or termination of this Franchise Agreement.
You agree that you will not, without our written approval, use or authorize any of your owners to use any services, material, inventory, supplies or equipment and/or suppliers, distributors, manufacturers or service providers not authorized by us for your HydroDog Business.
You must utilize any ordering system that any of our Approved Suppliers (including us or our affiliates) designate.
We, our af
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
Based on the 2025 Hydrodog Franchise Disclosure Document, Hydrodog franchisees must purchase designated or approved products and services from Hydrodog or its approved suppliers. Hydrodog may modify the list of approved manufacturers, suppliers, or distributors of operating assets and business materials. Franchisees are required to use any ordering system that Hydrodog's approved suppliers designate.
The FDD states that purchasing materials and inventory from suppliers that are not approved suppliers is grounds for default or termination of the franchise agreement. Franchisees cannot use any services, material, inventory, supplies, or equipment and/or suppliers, distributors, manufacturers, or service providers not authorized by Hydrodog for their HydroDog Business without written approval.
While the FDD excerpts specify that Hydrodog can designate approved suppliers and that franchisees must purchase from them, the document does not explicitly state whether Hydrodog has the right to unilaterally change or modify the mark-up or profit margins on sales to franchisees. To fully understand Hydrodog's rights in this area, a prospective franchisee should seek clarification from Hydrodog regarding its policies on pricing and profit margins for products and services sold to franchisees.