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 insurance coverage (Item 8)?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 9: FRANCHISEE'S OBLIGATIONS]
| Obligation | Section in Franchise Agreement | Item in Disclosure Document |
|---|---|---|
| a. Site selection and acquisition/ lease | 2.1, 2.3, 4.1, 4.3 and 5.1 | Items 7, 11 and 12 |
| 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 |
| c. Site development and other pre- | 2.1, 2.3, 4.1, 4.3, 5.7, 6.4, 7.1 and | Items 6, 7 and 11 |
| opening requirements | 7.3 | |
| d. Initial and ongoing training | 6.5, 7.1, 7.2 and 7.3 | Item 11 |
| e. Opening | 5.1, 5.2 and 5.7 | Item 11 |
| f. Fees | 6.1, 6.2, 6.3, 6.4, 6.5, 6.8, 6.9, 6.10 and 6.15 | Items 5, 6 and 7 |
| g. Compliance with standards and policies/Operating Manuals | 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 6.13, 8.2, 9.2, 11.1, 11.2, 11.3, 11.4, 11.5, 11.6, 11.7, 11.8, 11.9, 11.1 and 11.12 | Item 11 |
| h. Trademarks and proprietary | 8.1, 8.2, 8.3, 8.4, 9.1, 9.2 and 9.3 | Items 13 and 14 |
| information | ||
| i. Restrictions on products/services | 5.3, 5.4, 11.2 and 11.11 | Items 11 and 16 |
| offered | ||
| j. Warranty and customer service | 5.5 | None |
| requirements | ||
| k. Territorial development and sales | 2.1 | Item 12 |
| quotas | ||
| l. On-going product/service purchases | 5.2, 5.4, 11.2 and 11.11 | Item 8 |
| m. Maintenance, appearance and | 11.2 and 11.4 | Items 11 and 17 |
| remodeling requirements | ||
| n. Insurance | 6.14, 11.2, 19.1, 19.2, 19.3 and 19.4 | Items 7 and 8 |
| o. Advertising | 12.1, 12.6, 12.8, 12.9 and 12.10 | Items 6, 7 and 11 |
| p. Indemnification | 18.4 | Item 6 |
| q. Owner’s participation/ | 1.3, 7.1 and 11.12 | Items 11 and 15 |
| management/staffing | ||
| r. Records and reports | 11.2, 11.6, 13.1 and 13.2 | Item 11 |
| s. Inspections and audits | 14.1 and 14.2 | Items 6 and 11 |
| t. Transfer | 15.1, 15.2, 15.3, 15.4, 15.5 and 15.8 | Items 6 and 17 |
| u. Renewal | 3.1, 3.2 and 3.3 | Items 6 and 17 |
| v. Post-termination obligations | 17.1, 17.2, 17.3, 17.4, 17.5 and 17.6 | Item 17 |
| w. Non-competition covenants | 10 and 17.4 | Item 17 |
| x. Dispute resolution | 21.1, 21.2, 21.3, 21.4, 21.5, 21.6, 21.7, 21.9, 21.10, 21.11, 21.12, 21.13, 21.14, 21.15, 21.16 and 21.17 | Item 17 |
[Item 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES]
HydroDog Vehicle
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.
Point-of-Sale System and Other Computer System Requirements
You must purchase a point of sales system and certain other components of the Computer System (including software and other technology provided as part of the Technology Fee) from the suppliers that we designate from time to time. Other components of your Computer System may be purchased from suppliers of your choice and expense; however, the components must strictly adhere to our standards and specifications.
Insurance
You will be required to procure and maintain insurance in the amounts we prescribe. You agree to provide us with proof of coverage within 10 business days of our request, in the form of a certificate of insurance or other evidence satisfactory to us.
Currently we require the following insurance: general liability ($1,000,000/$2,000,000) with pet groomer professional liability coverage, animal bailee ($5,000), commercial automobile ($1,000,000) with uninsured motorist coverage (HydroDog Vehicle) and Worker's Compensation where necessary.
All insurance policies, except your workers compensation and commercial property liability policies, must contain, or be endorsed to contain, a provision naming us and our related entities as an additional insured. Specifically, with respect to liability arising from your premises, operations, products, and completed operations, the general liability policy should include an additional insured – grantor of franchise endorsement.
All required insurance policies, except for your Workers' Compensation policy, must be written by insurance companies with a rating of A-VIII (eight) or better in the most recent A.M. Best's Insurance Report (or other comparable publication we specify). Workers' Compensation policies can be issued by insurance companies with a policyholder rating of B plus (B+) or better.
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, the table in Item 9 indicates that pre-opening purchases/leases are addressed in 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 stipulations outlined in these sections when acquiring necessary items to begin operations. Item 8 specifies that franchisees must purchase or lease HydroDog Vehicles from Hydrodog, its affiliate, or its designated supplier. If leasing from another vendor, Hydrodog must approve the lease before it is signed. Franchisees are also required to buy the point-of-sale system and certain other computer system components from Hydrodog-designated suppliers. Other computer components can be sourced independently, but they must meet Hydrodog's standards.
Regarding insurance, Item 9 states that franchisee insurance obligations are detailed in Sections 6.14, 11.2, 19.1, 19.2, 19.3, and 19.4 of the Franchise Agreement, and Items 7 and 8 of the Disclosure Document. Item 8 further elaborates on these requirements, stating that Hydrodog requires franchisees to procure and maintain specific insurance coverage. Franchisees must provide proof of coverage within 10 business days of Hydrodog's request.
Currently, Hydrodog requires general liability insurance ($1,000,000/$2,000,000) with pet groomer professional liability coverage, animal bailee ($5,000), commercial automobile ($1,000,000) with uninsured motorist coverage (HydroDog Vehicle) and Worker's Compensation where necessary. All insurance policies, except workers compensation and commercial property liability policies, must include Hydrodog and its related entities as additional insureds, particularly for liability arising from premises, operations, products, and completed operations. All required insurance policies, except for Workers' Compensation, must be written by insurance companies with a rating of A-VIII or better in the most recent A.M. Best's Insurance Report. Workers' Compensation policies can be issued by insurance companies with a policyholder rating of B+ or better. Hydrodog may also require franchisees to obtain insurance policies from a supplier designated by Hydrodog. These insurance requirements are crucial for protecting both the franchisee and Hydrodog from potential liabilities and ensuring compliance with the franchise agreement.