Can a Hydrodog franchisee make ownership changes to their business without approval?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.3 Business Organization. If you are at any time a business organization ("Business Entity") (like a corporation, limited liability company or partnership) you agree and represent that:
- (a) you have the authority to execute, deliver and perform your obligations under this Agreement and are duly organized or formed and validly existing in good standing under the laws of the state of your incorporation or formation, and you have provided us with sufficient evidence of the same;
- (b) your organizational or governing documents will recite that the issuance and transfer of any ownership interests in you are restricted by the terms of this Agreement, and all certificates and other documents representing ownership interests in you will bear a legend referring to the restrictions of this Agreement; and you will provide us with copies of these documents for our review.
- (c) the Principal Owners Statement will completely and accurately describe all of your owners and their interests in you. A copy of our current form of Principal Owners Statement is attached to the Franchise Disclosure Document you were furnished;
- (d) you and your owners agree to revise the Principal Owners Statement as may be necessary to reflect any ownership changes and to furnish such other information about your organization or formation as we may request (no ownership changes may be made without our approval);
- (e) each of your owners during the Term will sign and deliver to us our standard form of Principal Owner's Guaranty undertaking to be bound jointly and severally by all provisions of this Agreement and any other agreements between you and us, and any
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees must obtain approval from Hydrodog before making ownership changes. Specifically, if the franchisee is a business entity, the organizational documents must state that any ownership interest issuance or transfer is restricted by the terms of the Franchise Agreement and subject to Hydrodog's approval. These restrictions must also be noted on all ownership certificates.
Hydrodog requires franchisees to revise the Principal Owners Statement to reflect any ownership changes and furnish any other information about the organization as requested. No ownership changes can occur without Hydrodog's explicit approval. Furthermore, all owners must sign and deliver Hydrodog's standard form of Principal Owner's Guaranty, binding them jointly and severally to all provisions of the Franchise Agreement.
This requirement ensures that Hydrodog maintains control over who is involved in the franchise system and that all owners are committed to upholding the standards and obligations of the franchise agreement. It is a common practice in franchising to have these types of restrictions to protect the brand and ensure consistency across all franchise locations. Prospective franchisees should be aware that they cannot freely transfer ownership without the franchisor's consent.