Can a Hydrodog franchisee engage in other businesses or activities that conflict with their obligations to operate the Hydrodog Business?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
You must at all times faithfully, honestly and diligently perform your obligations under any Franchise Agreement, continuously exert your best efforts to promote and enhance HydroDog Businesses and not engage in any other business or activity that conflicts with your obligations to operate your HydroDog Business in compliance with the Franchise Agreement.
- (a) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, other than your HydroDog Business;
- (b) have any direct or indirect controlling interest as a disclosed or beneficial owner in a Competitive Business, wherever located;
- (c) have any direct or indirect interest (e.g. through a spouse or child) as a disclosed or beneficial owner, investor, partner, director, officer, employee, consultant, member, Manager, representative or agent or in any other capacity in any Competitive Business operating (i) within the Territory; (ii) within twenty-five (25) miles of the Territory; or (iii) within twenty-five (25) miles of any other HydroDog Business's Territory in operation or under development on the later of (a) the effective date of the termination or expiration of this Agreement or (b) the date on which you cease to have any direct or indirect interest in a Competitive Business;
- (d) perform services as a director, officer, Manager, employee, consultant, representative, agent or otherwise for a Competitive Business, wherever located; or
- (e) on behalf of yourself or any other person, or as an employee, proprietor, owner, consultant, agent, contractor, employer, affiliate, partner, officer, director or associate, or stockholder of any other person or entity, or in any other capacity, engage in or conduct any other business if you have any significant operational or management responsibility or obligation regarding such business, if such other business would interfere with your obligations under this Agreement to develop and operate your HydroDog business or otherwise (other than the HydroDog Businesses operated under franchise agreements with us), unless your HydroDog business is managed by a Chief Operating Officer, or equivalent position, approved by us, who has satisfactorily completed our training programs. This provision does not prohibit passive investments in other businesses that do not compete directly or indirectly with HydroDog business. However, an interest in a business in which your capacity is either a director, officer or majority stockholder (or any combination thereof) does not constitute a passive investment, and will be considered a breach of these provisions of this Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 34–35)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees must dedicate themselves to the success of their Hydrodog business and avoid conflicts of interest. Franchisees must faithfully, honestly, and diligently perform their obligations under the Franchise Agreement, continuously exert their best efforts to promote and enhance HydroDog Businesses, and not engage in any other business or activity that conflicts with their obligations to operate their HydroDog Business in compliance with the Franchise Agreement.
The agreement prohibits franchisees from having a direct or indirect interest in a Competitive Business, which includes owning, operating, or supporting franchises or licenses for pet grooming, pet care, or related services. This restriction applies to any business that competes with Hydrodog, whether mobile, fixed, or internet-based. Franchisees are also restricted from performing services for a Competitive Business in any capacity.
However, the agreement does allow for passive investments in other businesses that do not directly or indirectly compete with Hydrodog. An interest in a business where the franchisee is a director, officer, or majority stockholder does not constitute a passive investment and will be considered a breach of the agreement. If a franchisee has significant operational or management responsibility in another business that interferes with their Hydrodog obligations, it is also a violation, unless the Hydrodog business is managed by a Chief Operating Officer approved by Hydrodog who has completed the required training programs.