In the event of a breach of the Hydrodog agreement, does the franchisee forfeit payment of amounts owed?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
17. RIGHTS AND OBLIGATIONS UPON TERMINATION
17.1 Payment of Amounts Owed To Us. You agree to pay us within fifteen (15) days after the effective date of termination or expiration of this Agreement, or on such later date that we determine amounts are due to us, all amounts due for Royalties, Marketing Fund Fees, contributions, amounts owed for purchases from us, interest due on any of the foregoing, and any and all other amounts owed to us which are then unpaid.
17.2 Marks. Upon the termination or expiration of this Agreement:
- (a) you may not directly or indirectly at any time or in any manner (except with respect to other HydroDog Businesses you own and operate) identify yourself or any business as a current or former HydroDog Business, or as one of our licensees or franchisees, use any Mark, any colorable imitation of a Mark or other indicia of a HydroDog Business in any manner or for any purpose or utilize for any purpose any trade name, trade or service mark or other commercial symbol that indicates or suggests a connection or association with us;
- (b) you agree to take immediate action as may be required to cancel all fictitious or assumed name or equivalent registrations relating to your use of any Mark;
- (c) if we do not have or do not exercise an option to purchase your HydroDog Business pursuant to this Agreement, you agree to deliver to us within thirty (30) days after, as applicable, the effective date of expiration of this Agreement or the Notification Date all signs, sign-faces, sign-cabinets, marketing materials, forms and other materials containing any Mark or otherwise identifying or relating to a HydroDog Business and allow us, without liability to you or third parties, to remove all such items from your HydroDog Business;
- (d) if we do not have or do not exercise an option to purchase your HydroDog Business pursuant to this Agreement, you agree that after the effective date of expiration of this Agreement or the Notification Date (whichever is applicable), you will promptly and at your own expense make such alterations we specify to distinguish your HydroDog Business clearly from its former appearance and from other the HydroDog Businesses so as to prevent confusion by the public;
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees are still obligated to pay all outstanding amounts owed to Hydrodog even upon termination or expiration of the franchise agreement. Specifically, within fifteen (15) days after the termination date, the franchisee must pay all due Royalties, Marketing Fund Fees, contributions, amounts owed for purchases from Hydrodog, any interest due, and all other unpaid amounts. This obligation remains regardless of the reason for termination, including a breach of the agreement by the franchisee.
Hydrodog also has the right to collect late payment fees and interest on overdue amounts. A late payment fee of ten percent (10%) of the amount due or the highest rate permitted by law will be applied to all Royalties, Marketing Fund Fees, amounts due for purchases, and any other amounts owed to Hydrodog or its affiliates. Interest accrues on all overdue amounts at a rate of the lesser of two percent (2%) per month or the highest contract rate permitted by law. These fees and interest continue to accrue on any outstanding balances, even if the franchise agreement is terminated due to a breach.
Furthermore, Hydrodog retains the right to offset any payments it may owe to the franchisee against any outstanding debts the franchisee owes to Hydrodog or its affiliates. This means that if Hydrodog owes the franchisee a refund or other payment, Hydrodog can deduct any outstanding amounts owed by the franchisee before issuing the payment. This provision ensures that Hydrodog can recover outstanding debts even after the franchise agreement has been terminated. The franchisee is responsible for all financial obligations to Hydrodog, even in the event of a breach of contract leading to termination.