After the Hydrodog franchise is terminated or expires, for how long is the franchisee prohibited from having an interest in a competing business?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. (subject to state law) | |
| (r) Non-competition covenants after the franchise is terminated or expires | Section 17.4; Exhibit "F" | No interest in competing business for 2 years at or within 25 miles of the Territory or within 25 miles of any Territory or any other HydroDog Business in (same restrictions apply after assignment). (subject to state law) |
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, a franchisee is restricted from engaging in any competing business for a period of two years after the termination or expiration of the franchise agreement. This non-compete clause applies within the territory of the former franchise, or within 25 miles of any Hydrodog territory or business. These restrictions also apply after an assignment of the franchise.
This means that if a franchisee's agreement ends, whether through termination or simply the end of its term, they cannot immediately open a similar hot dog business or work for a competitor in the Hydrodog system. This restriction is in place to protect Hydrodog's market share and confidential business information. The geographic scope of 25 miles is fairly standard in the franchise industry, as it aims to prevent franchisees from directly diverting customers from existing Hydrodog locations.
It is important to note that these non-compete covenants are subject to state law, which means the enforceability and specific terms may vary depending on the state in which the franchise operates. Prospective franchisees should consult with legal counsel to understand the specific non-compete laws in their state and how they apply to the Hydrodog franchise agreement. Understanding these restrictions is crucial for planning future business ventures after the franchise term ends.