From whom must a HydroDog franchisee acquire all Business Materials and Operating Assets?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
utility, sign, health, sanitation, business and other permits and licenses required to construct, develop and operate your HydroDog Business; and - (c) acquire the HydroDog Vehicle.
- 5.2 Operating Assets and Business Materials. We will identify in the Manual or through written notice to you the necessary fixtures, furnishings, equipment, hardware and software (the "Operating Assets"), as well as products, services, materials, inventory, equipment, uniforms, apparel, supplies, signs, emblems, lettering, logos, display materials, advertising, vehicle wraps, and financial and accounting services necessary for your HydroDog Business to begin or sustain operations (collectively, the "Business Materials"). We will also specify the minimum standards and specifications that must be met, and identify the approved suppliers from whom these items may be purchased or leased (which may include us and/or our affiliates). You agree to acquire all Business Materials and Operating Assets from us or suppliers we have previously approved, which may include us or our affiliates or third parties. If we do not designate or approve a supplier for the Operating Assets or Business Materials, you must purchase
them in accordance with, and they must meet our System Standards. We may designate quantities, models, brands and inventory levels of Operating Assets and Business Materials. We have the exclusive right to require you to purchase from us, or our designated suppliers, any Operating Assets or Business Materials which bear or display our Marks, and we may be the sole source supplier of such items at our sole discretion. We will only approve suppliers whose Business Materials and Operating Assets meet the quality standards that we establish from time-to-time. You agree to only place or display at, in or on the HydroDog Vehicle (interior and exterior) such signs, emblems, lettering, logos and display materials that we periodically approve. You must pay for the cost of obtaining and installing any Business Materials and Operating Assets we require.
- 5.3 Territory Development Schedule. You must obtain and operate HydroDog Vehicles in accordance with the deadlines set forth in the Territory Development Schedule.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees must acquire all Business Materials and Operating Assets from Hydrodog itself or from suppliers that Hydrodog has previously approved. These approved suppliers may include Hydrodog, its affiliates, or other third parties. Business Materials include items like products, services, materials, inventory, equipment, uniforms, signs, and advertising. Operating Assets include necessary fixtures, furnishings, equipment, hardware, and software.
Hydrodog retains significant control over the supply chain, as they specify the minimum standards and specifications for these items. If Hydrodog does not designate or approve a supplier for certain Operating Assets or Business Materials, the franchisee must purchase them in accordance with Hydrodog's System Standards. Hydrodog also has the exclusive right to require franchisees to purchase items bearing their Marks from Hydrodog or its designated suppliers, potentially making Hydrodog the sole source for these items.
Franchisees are not allowed to use any suppliers of services, materials, or inventory that Hydrodog has not previously approved. Purchasing materials and inventory from non-approved suppliers can lead to default or termination of the Franchise Agreement. Hydrodog will provide a list of approved manufacturers, suppliers, or distributors, which they may modify over time based on their business judgment.
Hydrodog, its affiliates, or approved suppliers may charge mark-ups and profit margins on the sale of business materials, operating assets, supplies, and inventory. Hydrodog does not guarantee any limit on the amount of markup/profit margin and may change these margins at any time. This gives Hydrodog considerable control over costs incurred by the franchisee. Prospective franchisees should carefully consider the potential impact of these markups on their profitability and discuss these potential costs with Hydrodog during their due diligence.