What are the Hydrodog franchisee's obligations regarding pre-opening purchases/leases (Item 9) and how do these relate to the restrictions on sources of products and services (Item 8)?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in Franchise Agreement | Item in Disclosure Document |
|---|---|---|
| b. Pre-opening purchases/leases | 2.3, 4.3, 5.1, 5.2, 5.3, 5.4 and 6.4 | Items 5, 6, 7, 8, 11 and 16 |
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.
You must offer for sale all products, and perform all services, that we require from time to time for HydroDog Businesses. We reserve the sole right to decide if any supplier, vendor or item is authorized and reserve the right to disapprove or refuse to approve any supplier, vendor or item. You are not permitted, without our prior written approval, to use any inventory or order from any suppliers or vendors that have not been authorized by us. Under no circumstances may you offer for sale any products or perform any services that we have not previously authorized (See Items 8 and 9). Our System Standards also regulate required or authorized products, product categories and supplies. Pursuant to our System Standards, franchisees may not directly contact our or our affiliates' suppliers or vendors. Offering or selling products or inventory that has not been approved by us is grounds for termination of the Franchise Agreement. We have the right to change the types of required and/or authorized goods and services from time to time.
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
You must purchase or lease all HydroDog Vehicles to be used in the operation of your HydroDog Business from us, our affiliate, or our designated supplier.
If you intend to lease the vehicle for your HydroDog Business from a vendor other than our approved vendor, you are required to submit the proposed lease to us for approval prior to signing it.
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees have obligations regarding pre-opening purchases and leases, as detailed in Item 9. Specifically, section 'b. Pre-opening purchases/leases' of Item 9 references sections 2.3, 4.3, 5.1, 5.2, 5.3, 5.4 and 6.4 of the Franchise Agreement and Items 5, 6, 7, 8, 11 and 16 of the disclosure document. This means franchisees must adhere to the guidelines outlined in these sections when making pre-opening purchases or entering into leases. Item 8 and Item 16 place restrictions on where franchisees can source products and services.
Item 8 emphasizes that to maintain Hydrodog's system standards and protect its reputation, franchisees must purchase products, supplies, equipment, and services according to Hydrodog's specifications and only from designated or approved suppliers. Franchisees must maintain a complete inventory of approved items. If a franchisee wants to use a non-approved supplier, they can submit a written request for approval, but Hydrodog can inspect the supplier's facilities and require product samples for testing, with the franchisee potentially bearing the evaluation costs. The franchisee cannot use the proposed supplier until written approval is received.
Item 16 reinforces these restrictions, stating that franchisees must offer for sale all products and perform all services that Hydrodog requires. Hydrodog reserves the right to decide if any supplier, vendor, or item is authorized and can disapprove any that don't meet their standards. Franchisees cannot use unauthorized inventory or order from unapproved suppliers without prior written approval. Selling unapproved products or services can lead to termination of the Franchise Agreement. These restrictions ensure consistency and quality across all Hydrodog locations, but they also limit the franchisee's autonomy in choosing suppliers and potentially negotiating better deals.
Furthermore, franchisees are obligated to acquire all Business Materials and Operating Assets from Hydrodog or its previously approved suppliers. If Hydrodog does not designate or approve a supplier for these items, the franchisee must purchase them from a supplier meeting Hydrodog's minimum standards and specifications. For the Hydrodog vehicle, franchisees must purchase or lease it from Hydrodog, its affiliate, or a designated supplier. If leasing from a vendor other than Hydrodog's approved vendor, the lease must be submitted to Hydrodog for approval before signing. These requirements ensure that franchisees use equipment and materials that meet Hydrodog's standards, but they may also limit the franchisee's options and potentially increase costs.