What is the exclusive purpose for which a Hydrodog advertising cooperative must be organized?

According to Hydrodog's 2025 Franchise Disclosure Document, if Hydrodog establishes a regional advertising cooperative, it must be organized for the exclusive purpose of administering marketing programs and developing standardized promotional materials for members to use in local advertising within the cooperative's area. These cooperatives are created at Hydrodog's discretion in areas with two or more Hydrodog businesses. Franchisees are required to join the cooperative in their area upon Hydrodog's request.

This means that the advertising cooperative's activities are limited to marketing and promotional efforts. It cannot engage in other business activities or initiatives outside of this scope. The cooperative can create its own rules and procedures, but Hydrodog must approve them, and they cannot change a franchisee's rights or obligations under the franchise agreement.

This setup ensures that Hydrodog maintains control over the marketing and advertising strategies used by its franchisees, while also allowing for some regional customization through the cooperative. Franchisees must contribute to the cooperative as determined by a majority vote of the members, subject to Hydrodog's approval. These contributions count toward the franchisee's local advertising requirement; however, if the contribution is less than the required local advertising spend, the franchisee must spend the difference locally.