What does 'control' mean in the context of the Hydrodog franchise agreement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
21.22 Certain Definitions.
- (a) The term "family member" refers to parents, spouses, offspring and siblings, and the parents and siblings of spouses.
- (b) The term "affiliate" means any Business Entity directly or indirectly owned or controlled by a person, under common control with a person or controlled by a person.
- (c) The terms "franchisee, franchise owner, you and your" are applicable to one or more persons, a Business Entity, as the case may be.
- (d) The singular use of any pronoun also includes the plural and the masculine and neuter usages include the other and the feminine.
- (e) The term "person" includes individuals and Business Entities.
- (f) You and we are sometimes referred to individually as a "party" and collectively as "parties."
- (g) The term "section" refers to a section or subsection of this Agreement.
- (h) The word "control" means the power to direct or cause the direction of management and policies.
(i) The word "owner" means any person holding a direct or indirect, legal or beneficial ownership interest or voting rights in another person (or a transferee of this Agreement or an interest in you), including any person who has a direct or indirect interest in you or this Agreement and any person who has any other legal or equitable interest, or the power to vest in himself any legal or equitable interest, in the revenue, profits, rights or assets.
(j) The term "Reasonable Business Judgment" refers to any and all decisions, actions and/or choice
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the term 'control' within the franchise agreement refers to the power to direct or cause the direction of management and policies. This definition is important for franchisees, especially those operating as a business entity, as it clarifies who has the authority to make key decisions affecting the Hydrodog business.
For franchisees who are individuals, 'control' naturally rests with them unless they become disabled. However, if the franchisee is a business entity, the agreement specifies that a 'Designated Owner' must be identified to manage the Hydrodog business and make decisions. This Designated Owner should hold at least a ten percent interest in the franchisee entity and is responsible for communicating with Hydrodog.
Furthermore, the definition of 'control' becomes relevant when considering ownership transfers or changes within the franchisee entity. Hydrodog retains approval rights over the issuance and transfer of ownership interests, particularly if it involves a controlling interest. This ensures that any new owner with the power to direct management and policies is vetted and approved by Hydrodog, maintaining consistency and standards across the franchise system. Understanding this definition is crucial for any prospective Hydrodog franchisee, as it outlines the boundaries of their decision-making authority and the franchisor's oversight.