Can Hydrodog cooperative contributions exceed the local advertising expenditure?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right, in our discretion, to designate any geographic area for purposes of establishing a regional advertising and promotional cooperative ("Cooperative"). All franchisees in the designated geographical area must participate in the Cooperative. Cooperative contributions will be credited towards your Local Advertising expenditure, and will not exceed the Local Advertising expenditure unless a majority of the Cooperative's members vote to spend an amount greater than the Local Advertising expenditure on advertising. Each Cooperative will be organized for the exclusive purpose of administering regional advertising programs and developing, subject to our approval, standardized advertising materials for use by the members in local advertising. Each Cooperative must operate from written governing documents which will be made available to franchisees. Each year, every operating cooperative will prepare financial statements which will be made available to franchisees. No promotional or advertising plans or materials may be used by a Cooperative or furnished to its members without our prior approval. All such plans and materials will be submitted to us in accordance with the procedure set forth in Article 12.5 of the Franchise Agreement. We may grant to any franchisee, in our sole discretion, an exemption for any length of time from the requirement of membership in a Cooperative, upon written request of such franchisee stating reasons supporting such exemption. Our decision concerning such request for exemption will be final. We reserve the right to form, change, dissolve, or merge any Cooperative. (Franchise Agreement, Section 12.8)
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–30)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees may be required to participate in a regional advertising cooperative. The cooperative contributions are typically credited toward the franchisee's local advertising expenditure. However, the cooperative contributions can exceed the local advertising expenditure if a majority of the cooperative's members vote to spend a greater amount on advertising.
Each Hydrodog cooperative is formed to manage regional advertising programs and create standardized advertising materials, subject to Hydrodog's approval, for local advertising use by its members. These cooperatives must operate under written governing documents, which are accessible to all franchisees. Additionally, each operating cooperative is required to prepare annual financial statements that are also made available to franchisees.
Hydrodog retains significant control over these advertising cooperatives, including the right to form, change, dissolve, or merge any cooperative. All advertising and promotional plans and materials must be submitted for Hydrodog's approval at least 30 days before their intended use, unless they were prepared or previously approved by Hydrodog within the last 12 months. Hydrodog also reserves the right to grant exemptions from cooperative membership to individual franchisees upon written request.