What is the Hydrodog franchisee's obligation regarding the assignment of the agreement in the event of death or disability?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
we may require (in addition to the other requirements we have the right to impose) that the proposed owner execute an agreement, in a form provided or approved by us, agreeing to be bound jointly and severally by, to comply with, and to guarantee the performance of, all of your obligations under this Agreement.
- 15.5 Transfer Upon Death or Disability. Upon your death or disability or, if you are a Business Entity, the death or disability of the owner of a controlling interest in you, your or such owner's executor, administrator, conservator, guardian or other personal representative must transfer your interest in this Agreement or such owner's interest in you to a third party. Such disposition of this Agreement or the interest in you (including, without limitation, transfer by bequest or inheritance) must be completed within a reasonable time, not to exceed 6 months from the date of death or disability, provided that we may extend this period for up to an additional 6 months upon written request showing good cause for such extension, and will be subject to all of the terms and conditions applicable to transfers contained in this Section. A failure to transfer your interest in this Agreement or the ownership interest in you within this period of time constitutes a breach of this Agreement. For purposes of this Agreement, the term "disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent you or an owner of a controlling interest in you from managing and operating your HydroDog Business.
- 15.6 Operation Upon Death or Disability. If, upon your death or disability or the death or disability of the owner of a controlling interest in you, your HydroDog Business is not being managed by a trained Manager, your or such owner's executor, administrator, conservator, guardian or other personal representative must, within a reasonable time not to exceed three (3) months from the date of death or disability, appoint a Manager to operate your HydroDog Business. Such Manager will be required to complete training at your expense. Pending the appointment of a Manager as provided above or if, in our judgment, your HydroDog Business is not being managed properly any time after your death or disability or after the death or disability of the owner of a controlling interest in you, we have the right, but not the obligation, to appoint a Manager for your HydroDog Business. All funds from the operation of your HydroDog Business during the management by our appointed Manager will be kept in a separate account, and all expenses of your HydroDog Business, including compensation, other costs and travel and living expenses of our Manager, will be charged to this account. We also have the right to charge a reasonable management fee (in addition to the Royalty and Marketing Fund Fees and contributions payable under this Agreement) during the period that our appointed Manager manages your HydroDog Business, which will not exceed four hundred dollars ($400) per day plus our reasonable expenses. Operation of your HydroDog Business during any such period will be on your behalf, provided that we shall use commercially reasonable efforts in operating the business but shall have no liability to you, your owners, or any third party for any debts, losses, or obligations incurred by your HydroDog Business or to any of your creditors for any products, materials, supplies or services your HydroDog Business purchases during any period it is managed by our appointed Manager.
- 15.7 Effect of Consent to Transfer.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, in the event of the franchisee's death or disability, or the death or disability of an owner with a controlling interest, the executor, administrator, conservator, guardian, or other personal representative is responsible for transferring the interest in the Franchise Agreement to a third party. This transfer must occur within a reasonable timeframe, specifically within 6 months from the date of death or disability. However, an extension of up to an additional 6 months may be granted upon written request, provided there is a valid reason for the extension.
If the Hydrodog business is not being managed by a trained manager after the death or disability, the representative must appoint one within three months. This manager will need to complete training, which will be at the expense of the estate or the disabled owner. If a manager is not appointed or if Hydrodog believes the business is not being managed properly, Hydrodog has the right, but not the obligation, to appoint a manager.
During the period when Hydrodog's appointed manager is running the business, all funds will be kept in a separate account. Expenses related to the business, including the manager's compensation, costs, and travel, will be charged to this account. Hydrodog also has the right to charge a reasonable management fee, not exceeding $400 per day, in addition to the standard royalty and marketing fund fees. The business will be operated on behalf of the franchisee, but Hydrodog will not be liable for any debts, losses, or obligations incurred during this period.
A failure to transfer the interest in the Franchise Agreement or the ownership interest within the specified timeframe constitutes a breach of the agreement. Furthermore, any assignment of the Franchise Agreement by the franchisee must be approved by Hydrodog in writing.