What factors are specifically excluded from the valuation of the Hydrodog Business when determining the purchase price?

According to Hydrodog's 2025 Franchise Disclosure Document, when Hydrodog exercises its right to purchase a franchise, the purchase price will be the fair market value of the business, determined in a manner consistent with reasonable depreciation of the business's equipment, signs, inventory, materials, and supplies. However, the valuation will specifically exclude certain intangible assets.

The factors excluded from the valuation of the Hydrodog Business include the value of the franchise itself, any rights granted by the franchise agreement, the value of the Hydrodog trademarks or copyrights, and the value derived from participation in the Hydrodog network of businesses. This means that the purchase price will primarily reflect the tangible assets and the business's independent operational value, not the brand recognition or franchise system benefits.

This exclusion is significant for a prospective franchisee because it clarifies how the business will be valued if Hydrodog decides to purchase it back. Franchisees should understand that the resale value in such a scenario will not include the value of the Hydrodog brand or the franchise system. This is a fairly standard practice in franchising, as the brand and system are the franchisor's intellectual property. Franchisees should consider this when projecting potential returns on investment and exit strategies.