What is the exception to the rule that a Hydrodog franchisee cannot engage in another business that interferes with their Hydrodog obligations?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) on behalf of yourself or any other person, or as an employee, proprietor, owner, consultant, agent, contractor, employer, affiliate, partner, officer, director or associate, or stockholder of any other person or entity, or in any other capacity, engage in or conduct any other business if you have any significant operational or management responsibility or obligation regarding such business, if such other business would interfere with your obligations under this Agreement to develop and operate your HydroDog business or otherwise (other than the HydroDog Businesses operated under franchise agreements with us), unless your HydroDog business is managed by a Chief Operating Officer, or equivalent position, approved by us, who has satisfactorily completed our training programs. This provision does not prohibit passive investments in other businesses that do not compete directly or indirectly with HydroDog business. However, an interest in a business in which your capacity is either a director, officer or majority stockholder (or any combination thereof) does not constitute a passive investment, and will be considered a breach of these provisions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, a franchisee is generally prohibited from engaging in other business activities that would interfere with their obligations to develop and operate their Hydrodog business. However, there is an exception to this rule.
The exception is that a Hydrodog franchisee can engage in another business that would typically be considered a conflict of interest if their Hydrodog business is managed by a Chief Operating Officer (or equivalent position). This COO must be approved by Hydrodog and must have satisfactorily completed Hydrodog's training programs.
Additionally, the FDD specifies that passive investments in other businesses that do not directly or indirectly compete with Hydrodog are permitted. However, if the franchisee holds a position as a director, officer, or majority stockholder in another business, it will not be considered a passive investment and will be seen as a breach of the agreement.