After the Hydrodog franchise is terminated or expires, what is the geographic limit on the non-compete covenant?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
r your termination without cause, of the agreement (but not expiration). |
| Provisions | Section in | Summary |
|---|---|---|
| Franchise or Other Agreement | ||
| (p) Death or disability of franchisee | Sections 15.5 and 15.6 | Franchise or an ownership interest in you must be assigned to an approved buyer within 3 months and must be run by a trained manager during the period prior to the assignment. Assignment is subject to our right of first refusal. |
| (q) | Section 10 | No interest in a competitive business, no |
| Non-competition | controlling ownership interest in, or | |
| covenants during the | performance of services for, a competitive | |
| term of the franchise | business anywhere. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 36–38)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, after the franchise is terminated or expires, the franchisee is subject to a non-compete covenant. This means the franchisee cannot have an interest in a competing business for 2 years. This restriction applies at or within 25 miles of the Territory granted to the franchisee.
Additionally, the non-compete extends to within 25 miles of any Territory or any other Hydrodog Business. This suggests that the non-compete is not limited to just the franchisee's territory but also covers a broader area around other Hydrodog locations. The FDD also notes that the same restrictions apply after assignment, meaning if the franchise is transferred, these non-compete terms still hold.
It is important to note that the enforceability of non-compete agreements can vary by state law, as indicated by the phrase "(subject to state law)" following the summary of the non-competition covenants. A prospective franchisee should consult with a legal professional to understand the specific implications and enforceability of this clause in their state.