What does Hydrodog consider when determining the transaction price for a franchise?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for providing franchisees with the franchise rights to operate a franchise. To determine the transaction price, the Company considers its customary business practices and the terms of the underlying agreement. For the purpose of determining transaction prices, the Company assumes performance obligations will be satisfied as promised in accordance with franchise agreements and that agreements will not be canceled, renewed, or modified.
Your HydroDog Business' fair market value will include the goodwill you developed in the market of your HydroDog Business that exists independent of the goodwill of the Marks and the System. The length of the remaining term of the lease for the HydroDog Vehicle will also be considered in determining your HydroDog Business's fair market value. At our option, we may substitute our repurchase right payment at fair market value of the HydroDog Vehicle, and receive credit for such payment.
We reserve the right to exclude from the assets purchased cash or its equivalent and any equipment, signs, inventory, materials, and supplies that are not reasonably necessary (in function or quality) for the operation of the HydroDog Business, or that do not meet our standards for the HydroDog Businesses. The purchase price will be adjusted accordingly to reflect such exclusions.
If we and you are unable to agree on your HydroDog Business's fair market value, its fair market value will be determined by three (3) independent appraisers who collectively will conduct one (1) appraisal. We will appoint 1 appraiser, you will appoint one (1) appraiser and the two (2) party appointed appraisers will appoint the third (3rd) appraiser. You and we agree to select our respective appraisers within fifteen (15) days after we notify you that we are exercising our option to purchase your HydroDog Business, and the two (2) appraisers so chosen are obligated to appoint the third (3rd) appraiser within fifteen (15) days after the date on which the last of the two (2) party-appointed appraisers was appointed. You and we will bear the cost of our own appraisers and share equally the fees and expenses of the third (3rd) appraiser chosen by the two (2) party-appointed appraisers. The appraisers are obligated to complete their appraisal within thirty (30) days after the third (3rd) appraiser's appointment.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the transaction price is the amount the company expects to receive in exchange for granting franchise rights. To determine this price, Hydrodog considers its standard business practices and the terms outlined in the franchise agreement. Hydrodog assumes that all obligations will be fulfilled as promised within the franchise agreements and that these agreements will not be canceled, renewed, or modified when determining transaction prices.
When Hydrodog purchases a franchisee's business, the fair market value will include the goodwill the franchisee developed independent of Hydrodog's brand. The remaining lease term for the HydroDog Vehicle is also a factor. Hydrodog can opt to pay the fair market value for the HydroDog Vehicle and receive credit for that payment.
However, Hydrodog reserves the right to exclude assets like cash, equipment, signs, inventory, materials, and supplies if they are unnecessary for the business operation or do not meet Hydrodog's standards. The purchase price will be adjusted to reflect these exclusions. If Hydrodog and the franchisee cannot agree on the fair market value, it will be determined by three independent appraisers, one chosen by Hydrodog, one by the franchisee, and a third chosen by the first two. Each party bears the cost of their appraiser, and they split the cost of the third appraiser.