What are the consequences if a Hydrodog franchisee defaults on the financing agreement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| Parameter | Initial Franchise Fee and for additional territories |
|---|---|
| Item Financed (1) | Up to 50% of the Initial Franchise Fee |
| Source of Financing | Us |
| Down Payment | $20,000 |
| Amount Financed | Up to 50% |
| Interest Rate/Finance Charge | 8% per annum (including finance charges) |
| Period of Repayment | 60 months |
| Security Required | Personal Guarantee |
| Whether a Person Other than the Franchisee Must Personally Guarantee the Debt (2) | If the franchisee is an entity, its owners must personally guarantee the debt |
| Prepayment Penalty | None |
| Liability Upon Default | Accelerated obligation to pay the entire amount due, pay our court costs and attorney fees incurred in collecting the debt, and termination of the franchise. |
| Waiver of Defenses or Other Legal | Waiver of right to a jury trial; homestead and other exemptions; |
| Rights | waiver of presentment, demand, protest, notice of dishonor. |
| Intent to Sell (3) | There is no intent to sell, assign or factor the debt to a third party. |
| Consideration for placement of | None |
| financing (4) |
Source: Item 10 — FINANCING (FDD page 22)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if a franchisee defaults on their financing agreement with Hydrodog, several consequences may occur. Hydrodog can accelerate the obligation to pay the entire amount due immediately. This means the franchisee will be required to pay the full remaining balance of the loan, not just the past-due payments.
Additionally, the franchisee is responsible for covering Hydrodog's court costs and attorney fees incurred while collecting the debt. This can add a significant financial burden on top of the accelerated loan repayment. Finally, a default can lead to the termination of the franchise agreement, which means the franchisee would lose the right to operate their Hydrodog business.
Furthermore, the agreement includes a waiver of certain legal rights, such as the right to a jury trial, homestead and other exemptions, and waiver of presentment, demand, protest, notice of dishonor. This could limit the franchisee's ability to defend themselves in court should Hydrodog pursue legal action to recover the debt. Given these potential consequences, prospective Hydrodog franchisees should carefully consider their financial situation and ability to repay the loan before entering into a financing agreement with Hydrodog.