What constitutes a 'Competitive Business' that a former Hydrodog franchisee is restricted from being involved with?

According to Hydrodog's 2025 Franchise Disclosure Document, a 'Competitive Business' is broadly defined. It includes any business or facility that owns, operates, manages, grants, sells, offers, or supports franchises or licenses to others. This definition extends to mobile, fixed, internet, or catalog-based businesses or facilities offering pet grooming, pet care, pet products, or services. Essentially, any pet-related products and services that are identical, similar to, or competitive with Hydrodog's offerings fall under this umbrella.

However, there are exceptions. A 'Competitive Business' does not include another Hydrodog Business operating under a franchise agreement with them. Furthermore, Hydrodog retains the sole discretion to determine what other businesses might be considered competitive. This broad definition and the franchisor's discretion mean that franchisees need to be extremely cautious about any pet-related business ventures they consider, both during their franchise agreement and for a period afterward, due to non-compete clauses.

Specifically, franchisees are restricted from having a direct or indirect interest in a Competitive Business, whether as an owner, investor, partner, director, officer, employee, consultant, or agent. These restrictions apply not only within the franchisee's territory but also within twenty-five (25) miles of that territory, or within twenty-five (25) miles of any other Hydrodog Business's territory in operation or under development. This geographic restriction remains in effect from the termination or expiration date of the Franchise Agreement or from the date the franchisee ceases to have any interest in a Competitive Business.

Moreover, franchisees are prohibited from performing services for a Competitive Business, regardless of its location. They also cannot engage in any other business that would interfere with their obligations to develop and operate their Hydrodog business, unless they have a Chief Operating Officer (or equivalent) approved by Hydrodog managing their business. Passive investments in non-competing businesses are permitted, but an interest as a director, officer, or majority stockholder is not considered passive and would be a breach of the agreement. These restrictions are in place to protect Hydrodog's market position and confidential information.