What is the definition of 'Franchisee Entity' in the context of the Hydrodog Principal Owner's Statement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
21.22 Certain Definitions.
- (c) The terms "franchisee, franchise owner, you and your" are applicable to one or more persons, a Business Entity, as the case may be.
- 11.13 Management. If you are an entity, you are required to complete and update, as necessary, the statement of ownership attached hereto as Attachment B throughout the term of this Agreement, and to provide us with a copy of any such updates within thirty (30) days of making them. Your HydroDog Business shall be managed by you, or if you are an entity, by one of your shareholders, partners, or members who is a natural person, holding at least a ten percent (10%) interest in the franchisee entity, and who is designated in writing to us as the person to make all decisions for the franchisee entity and to be principally responsible for communicating with us about your HydroDog Business ("Designated Owner"). Under certain circumstances we may allow you to appoint a designated manager ("General Manager") to run the day-to-day operations of your Franchised Business; the General Manager need not have an ownership interest in the franchisee entity. In addition, if you are an entity, all persons who own twenty percent (20%) or more of the beneficial ownership interests in the entity and each such person's respective spouse shall personally and unconditionally guaranty franchise owner's performance under this Agreement by signing the Owners Agreement attached hereto as Attachment D.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if a franchisee is a business organization, such as a corporation, limited liability company, or partnership, it is considered a 'Business Entity.' The terms 'franchisee, franchise owner, you and your' are applicable to one or more persons or a Business Entity, as the case may be.
If the franchisee is a business entity, the Principal Owners Statement must accurately describe all owners and their interests in the entity. Furthermore, the organizational documents must state that the issuance and transfer of any ownership interests are restricted by the terms of the Franchise Agreement. All owners must sign a Principal Owner's Guaranty, agreeing to be bound by the Franchise Agreement.
Hydrodog requires that if the franchisee is an entity, it must designate a 'Designated Owner' who holds at least a 10% interest in the franchisee entity. This Designated Owner is responsible for making all decisions for the franchisee entity and communicating with Hydrodog. Additionally, all individuals owning 20% or more of the beneficial ownership interests in the entity, along with their spouses, must personally guarantee the franchise owner's performance under the Franchise Agreement by signing the Owners Agreement.