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 specific signage (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 |
| l. On-going product/service purchases | 5.2, 5.4, 11.2 and 11.11 | Item 8 |
| n. Insurance | 6.14, 11.2, 19.1, 19.2, 19.3 and 19.4 | Items 7 and 8 |
5.2 Operating Assets and Business Materials. 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
5.1 Business Development. You are required to obtain our approval and open the HydroDog Business within thirty (30) days after receiving your HydroDog Vehicle (the "Opening Date"). You are solely responsible for complying with all laws, ordinances, rules and regulations relating directly or indirectly to the development of your HydroDog Business. You are solely responsible, as between us (and our affiliates or other franchise owners) and you, for any and all claims, liabilities and costs relating to non-compliance or alleged non-compliance with any such laws, rules, ordinances or regulations, and you must remedy, at your expense, any such non-compliance or alleged non-compliance. Without limiting your foregoing obligations, you agree, at your own expense, to do the following with respect to developing your HydroDog Business:
- (a) secure and provide us proof of your securing all financing required to develop and operate your HydroDog Business;
- (b) obtain all vehicle, utility, sign, health, sanitation, business and other permits and licenses required to construct, develop and operate your HydroDog Business; and
- (c) acquire the HydroDog Vehicle.
You agree not to open your HydroDog Business until:
- (a) we have approved your HydroDog Business as developed in accordance with our specifications and standards;
- (b) training has been completed to our satisfaction;
- (c) the Franchise Fee has been paid (subject to state law or state imposed financial assurance requirements);
- (d) the Initial Tool Package has been purchased;
- (e) we have approved the Managers of your HydroDog Business, if any, and you have demonstrated to us that the pre-opening conditions of this Agreement have been fulfilled.
- (f) you have furnished us with copies of all insurance policies required by this Agreement, or such other evidence of insurance coverage and payment of premiums as we request or accept; and
- (g) you have provided us with copies of all required documents pertaining to your acquisition and delivery of the HydroDog Vehicle.
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. Specifically, franchisees must adhere to sections 2.3, 4.3, 5.1, 5.2, 5.3, 5.4, and 6.4 of the Franchise Agreement, which are further outlined in Items 5, 6, 7, 8, 11, and 16 of the disclosure document. This encompasses various aspects of setting up the Hydrodog business before its launch.. Item 8 is referenced in Item 9 as it relates to on-going product/service purchases and insurance requirements.
Item 5.2 specifies that Hydrodog will identify 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. These are essential for the Hydrodog business to begin and sustain operations. Franchisees must acquire all Business Materials and Operating Assets from Hydrodog or its previously approved suppliers, which may include Hydrodog, its affiliates, or third parties. 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.
Furthermore, franchisees are required to secure all financing, permits, and licenses necessary to develop and operate their Hydrodog Business, including those related to the vehicle, utilities, signs, health, sanitation, and general business operations. The franchisee is responsible for complying with all applicable laws, ordinances, rules, and regulations related to the development of their Hydrodog business. They are also responsible for any claims, liabilities, and costs associated with non-compliance or alleged non-compliance with these regulations, and must remedy any such issues at their own expense. The franchisee must obtain Hydrodog's approval and open the business within 30 days after receiving the Hydrodog Vehicle.
Item 5.8 states that a franchisee cannot open their HydroDog Business until Hydrodog approves the business's development according to its specifications and standards, training is completed to Hydrodog's satisfaction, the Franchise Fee has been paid, the Initial Tool Package has been purchased, Hydrodog has approved the managers (if any), the franchisee has demonstrated fulfillment of pre-opening conditions, copies of required insurance policies have been furnished, and all required documents pertaining to the HydroDog Vehicle acquisition and delivery have been provided.