What does 'Description of Interest' refer to in the context of the Hydrodog Principal Owner's Statement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
ermination of this Agreement; and
We have approved your request to purchase a HydroDog Business in reliance on all of your representations.
- 1.3 Business Organization. If you are at any time a business organization ("Business Entity") (like a corporation, limited liability company or partnership) you agree and represent that:
- (a) you have the authority to execute, deliver and perform your obligations under this Agreement and are duly organized or formed and validly existing in good standing under the laws of the state of your incorporation or formation, and you have provided us with sufficient evidence of the same;
- (b) your organizational or governing documents will recite that the issuance and transfer of any ownership interests in you are restricted by the terms of this Agreement, and all certificates and other documents representing ownership interests in you will bear a legend referring to the restrictions of this Agreement; and you will provide us with copies of these documents for our review.
- (c) the Principal Owners Statement will completely and accurately describe all of your owners and their interests in you. A copy of our current form of Principal Owners Statement is attached to the Franchise Disclosure Document you were furnished;
- (d) you and your owners agree to revise the Principal Owners Statement as may be necessary to reflect any ownership changes and to furnish such other information about your organization or formation as we may request (no ownership changes may be made without our approval);
- (e) each of your owners during the Term will sign and deliver to us our standard form of Principal Owner's Guaranty undertaking to be bound jointly and severally by all provisions of this Agreement and any other agreements between you and us, and any
amendments or modifications thereto. A copy of our current form of Principal Owners Guaranty is attached to the Franchise Disclosure Document; and
- (f) at our request, you will furnish true and correct copies of all documents and contracts governing the rights, obligations and powers of your owners and agents (like articles of incorporation or organization and partnership, operating or shareholder agreements).
- (g) a Principal Owner of your HydroDog Business Entity (defined as a person with at least a twenty percent (20%) ownership interest in you) must: (i) have management responsibility and authority over the "Business" (defined as your HydroDog Business) on a day-to-day basis;
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the 'Description of Interest' in the Principal Owners Statement refers to a complete and accurate description of all owners and their respective ownership stake in the Hydrodog Business Entity. This statement is crucial when the franchisee is a business organization, such as a corporation or limited liability company.
Hydrodog requires this detailed disclosure to ensure transparency and to maintain control over who owns and operates its franchises. The Principal Owners Statement, a standard form provided by Hydrodog, must be revised to reflect any ownership changes, and these changes are subject to Hydrodog's approval. This allows Hydrodog to keep track of who the stakeholders are in each franchise and to ensure that all owners meet their standards.
Furthermore, each principal owner, defined as someone with at least a 20% ownership interest, must sign a Principal Owner's Guaranty, binding them to the franchise agreement. This ensures that all significant owners are personally liable and committed to upholding the terms of the agreement. This requirement is typical in franchising, as it provides the franchisor with an additional layer of security and accountability.
In practical terms, a prospective Hydrodog franchisee who operates as a business entity must be prepared to fully disclose all owners and their ownership percentages. Any changes to this ownership structure must be reported to and approved by Hydrodog, ensuring that the franchisor maintains control over the franchise network and that all principal owners are committed to the obligations outlined in the franchise agreement.