What are the Hydrodog franchisee's obligations regarding adherence to System Standards (Item 8) and how does this relate to the franchisor's right to change the menu (Item 8)?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
and that of our predecessor.
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
System Standards
To protect our reputation and goodwill and to maintain high standards of operation under the System, you must operate the HydroDog Business in strict conformance with our System standards, including the methods, standards, and specifications we prescribe from time to time in the Manual or otherwise in writing. The System standards may relate to any aspect of the appearance, function, cleanliness, and operation of the HydroDog Business.
Suppliers
You must purchase the products, supplies, equipment, and services that you use or sell in the HydroDog Business in accordance with our specifications and quality standards and, if applicable, only from suppliers we have designated or approved (which may include us or our affiliates). You will at all times maintain a complete inventory of approved items and supplies necessary for operating your HydroDog Business and providing services to customers.
If we require you to use an approved supplier for a particular item, but you wish to purchase the item from a supplier that we have not approved, you may submit a written request for approval of the supplier, unless it is an item for which we have designated a particular vendor as the source for the particular product or service. We will provide our standards and specifications to you or to the proposed supplier, subject to the supplier's execution of a confidentiality agreement in a form acceptable to us. We have the
right to inspect the proposed supplier's facilities and to require delivery of product samples either to us or to an independent laboratory designated by us for testing. You may be required to pay a fee, which will not exceed our reasonable costs incurred in evaluating the supplier, regardless of whether or not we approve the supplier. You may not purchase, sell, or offer for sale any products or services of the proposed supplier until you receive our written approval of the proposed supplier. We will notify you of approval or disapproval of the proposed supplier within 30 days after receiving your request and completion of evaluation and testing, if required. Our failure to respond within this timeframe shall not constitute approval of the proposed supplier. You may not sell or offer for sale any products or services of the proposed supplier until you receive our written approval.
We have the right to revoke approval of particular suppliers if we determine that the suppliers or their products or services no longer meet our standards. Upon receipt of written notice of revocation, you must stop buying from the disapproved supplier. In addition, if we revoke our approval of the products because they fail to meet our standards, you may be required not to use your remaining inventory of those products.
As of the issuance date of this disclosure document, we are the only approved supplier for the Initial Tools Package. We are also an approved supplier of HydroDog Vehicles and subleases for HydroDog Vehicles. We reserve the right to designate ourselves as an approved supplier, or as the only approved supplier, for additional particular products and services in the future.
We and our affiliates may receive rebates or other consideration from unaffiliated suppliers with respect to their sales of products or services to you or other HydroDog franchisees, whether or not the product or service is presently mentioned in this Item. We have negotiated agreements with Groomer's Choice and Evan's Apparel whereby each will pay us a 15% rebate on purchases made by our franchisees. These rebates will be retained by us to offset our costs of operating the franchise system and will not be shared with franchisees.
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees must operate their Hydrodog Business in strict conformance with the System Standards. These standards include the methods, standards, and specifications prescribed by Hydrodog in the Manual or in writing, relating to the appearance, function, cleanliness, and operation of the Hydrodog Business. Franchisees are also obligated to purchase products, supplies, equipment, and services according to Hydrodog's specifications and only from designated or approved suppliers. A complete inventory of approved items and supplies must be maintained. If a franchisee wants to use a non-approved supplier, they can submit a written request for approval, but this is not applicable if Hydrodog has already designated a particular vendor. Hydrodog has the right to inspect the supplier's facilities and require product samples for testing, with the franchisee potentially bearing the evaluation costs.
Hydrodog also retains the right to modify System Standards periodically, which may include changes to the required or authorized goods and services offered. Franchisees are obligated to comply with all modifications to System Standards, except for capital modifications, within the specified time period. This means Hydrodog can change the menu or the products franchisees are required to sell.
In practice, this means a Hydrodog franchisee must adhere to Hydrodog's operational guidelines, approved suppliers, and product offerings. Hydrodog retains significant control over the business's operations and offerings, and franchisees must adapt to changes in System Standards, including potential menu or product changes. Prospective franchisees should carefully consider these obligations and Hydrodog's rights to make changes, as these factors can impact their business operations and profitability.