What are the Hydrodog franchisee's obligations regarding pre-opening purchases/leases (Item 9) and how does this relate to the restrictions on approved suppliers (Item 8)?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
he 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.
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees face specific obligations regarding pre-opening purchases and leases, closely tied to restrictions on approved suppliers. Before opening, a franchisee must acquire a HydroDog Vehicle from Hydrodog or its approved suppliers. The franchisee must also obtain an Initial Tools Package. The franchisee must open their HydroDog business within 30 days of receiving the HydroDog Vehicle. These pre-opening requirements are essential steps that must be completed before commencing operations.
Hydrodog mandates that franchisees purchase products, supplies, equipment, and services from designated or approved suppliers, which may include Hydrodog itself or its affiliates. Franchisees must maintain a complete inventory of approved items. If a franchisee wishes to use a non-approved supplier, they can request approval, but Hydrodog can inspect the supplier's facilities and require product samples for testing, with the franchisee potentially bearing the evaluation costs. Hydrodog has the right to revoke supplier approval if standards are not met, and franchisees must cease buying from disapproved suppliers.
The FDD specifies that Hydrodog is the only approved supplier for the Initial Tools Package and is also an approved supplier of HydroDog Vehicles and subleases for HydroDog Vehicles. Hydrodog can designate itself as the sole approved supplier for additional products and services in the future. Hydrodog also negotiates purchase arrangements with suppliers, including price terms, for the benefit of franchisees.
These restrictions ensure quality control and standardization across all HydroDog franchises, protecting the brand's reputation. However, they also limit the franchisee's autonomy in sourcing products and services, potentially affecting costs and profit margins. Prospective franchisees should carefully evaluate these restrictions and consider their impact on their business operations and financial performance.