What are the Hydrodog franchisee's obligations regarding pre-opening purchases/leases (Item 9) and how does this relate to the franchisor's requirement for approved suppliers (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 |
ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
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 identify in the Manual or through written notice to you the necessary fixtures, furnishings, equipment, hardware and software (the "Operating Assets"), as well as products, services, materials, inventory, equipment, uniforms, apparel, supplies, signs, emblems, lettering, logos, display materials, advertising, vehicle wraps, and financial and accounting services necessary for your HydroDog Business to begin or sustain operations (collectively, the "Business Materials"). 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
The Business Management System may or will incorporate and consist of such functions as we designate from time-totime, which may include a mandatory Purchase Order System and rules for participation and use of such Purchase Order System, if any, which we may designate (the "Purchase Order System").
Through, and as part of, the Business Management System we may require that you establish an operating account with a bank or other financial institution that we designate or approve (the "Operating Account").
The Operating Account shall be the primary bank account utilized by your HydroDog Business.
We shall have the right to make automated withdrawals from the Operating Account for agreed-upon fees and payments due to us.
We, in our sole judgment, shall have the right to designate one of our officers or authorized representatives to have signature rights to the Operating Account, solely for the purpose of conducting transactions related to the franchise agreement.
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees have several obligations regarding pre-opening purchases and leases, as detailed in Item 9. These obligations are further defined within the franchise agreement and other items in the disclosure document. Specifically, franchisees are required to adhere to Hydrodog's standards and policies, which include purchasing or leasing necessary items from approved suppliers, as outlined in Item 8.
Item 8 emphasizes that Hydrodog retains the right to approve or disapprove any supplier, vendor, or item. Franchisees must obtain prior written approval before using any inventory or ordering from suppliers not authorized by Hydrodog. This restriction extends to all products and services offered by the franchisee. Failure to comply with these restrictions can lead to termination of the Franchise Agreement, as stated in Item 16.
Hydrodog also identifies necessary fixtures, furnishings, equipment, hardware, software, products, services, materials, inventory, equipment, uniforms, apparel, supplies, signs, emblems, lettering, logos, display materials, advertising, vehicle wraps, and financial and accounting services necessary for your HydroDog Business to begin or sustain operations. These must meet minimum standards and specifications and be purchased or leased from Hydrodog or its approved suppliers. This ensures consistency and quality across all Hydrodog franchises, but it also limits the franchisee's autonomy in sourcing supplies and potentially impacts costs.
Hydrodog may also require franchisees to utilize a Purchase Order System as part of the Business Management System. Franchisees may also be required to establish an operating account with a bank or financial institution designated or approved by Hydrodog. Hydrodog retains the right to make automated withdrawals from this account for agreed-upon fees and payments and may designate one of its officers or authorized representatives to have signature rights to the Operating Account.