What constitutes an unapproved transfer that could lead to termination of the Hydrodog franchise agreement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
complete training; failure to open your HydroDog Business within 90 days |
| Provisions | Other Agreement | Summary |
|---|---|---|
| of the Agreement Date; abandonment; unapproved transfers; conviction of or a plea of no contest to, a felony or other serious crime; dishonest or unethical conduct; unauthorized assignment of the Franchise Agreement or of an ownership interest in you or the HydroDog Business; loss of the HydroDog Vehicle; unauthorized use or disclosure of the Manuals or confidential information; failure to pay taxes, repeated defaults (even if cured); and bankruptcy. All non-curable defaults are subject to applicable state law. | ||
| (i) Franchisee's obligations on termination/ non renewal | Sections 17.1 - 17.4 | Obligations include payment of outstanding amounts, complete de-identification and return of confidential information (also see (r) below). |
| (j) Assignment of contract by franchisor | Sections 15.1, 15.4, 15.5 and 15.6 | No restriction on our right to assign. |
| (k) | Section 15.2 | Voluntary or involuntary, direct or indirect |
| "Transfer" by | assignment, sale, gift or other disposition of any | |
| franchisee - | interest in the Franchise Agreement, you or the | |
| defined | HydroDog Business. | |
| (l) Franchisor's approval of transfer by franchisee | Section 15.2 | We have the right to approve all transfers, even to a Business Entity controlled by you. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 36–38)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, an unapproved transfer of the franchise can lead to the termination of the Franchise Agreement. The FDD defines 'transfer' broadly, including any assignment, sale, gift, or other disposition of any interest in the Franchise Agreement, the franchisee, or the HydroDog Business.
Hydrodog retains the right to approve all transfers, even those to a business entity controlled by the franchisee. To gain approval for a transfer, several conditions must be met. The new franchisee must qualify under Hydrodog's standards, and the current franchisee must pay all outstanding amounts owed to Hydrodog. Additionally, the transferee and its managerial employees must complete the required training programs. The transferee must also agree to be bound by the terms and conditions of the existing Franchise Agreement or sign Hydrodog's then-current form of Franchise Agreement, and pay the then-current initial franchise fee.
Furthermore, Hydrodog must approve the material terms of the transfer, and the current franchisee must subordinate any amounts due to them from the transferee. Both parties must sign any other documents Hydrodog requires, including general releases. Hydrodog also retains the right of first refusal, allowing it to match any offer for an ownership interest in the franchisee, the Franchise Agreement, or the HydroDog Business. This right allows Hydrodog to maintain control over who enters the franchise system and under what terms.