Are Hydrodog franchisees prohibited from being an 'agent' in a Competitive Business?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
:
- (a) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, other than your HydroDog Business;
- (b) have any direct or indirect controlling interest as a disclosed or beneficial owner in a Competitive Business, wherever located;
- (c) have any direct or indirect interest (e.g. through a spouse or child) as a disclosed or beneficial owner, investor, partner, director, officer, employee, consultant, member, Manager, representative or agent or in any other capacity in any Competitive Business operating (i) within the Territory; (ii) within twenty-five (25) miles of the Territory; or (iii) within twenty-five (25) miles of any other HydroDog Business's Territory in operation or under development on the later of (a) the effective date of the termination or expiration of this Agreement or (b) the date on which you cease to have any direct or indirect interest in a Competitive Business;
- (d) perform services as a director, officer, Manager, employee, consultant, representative, agent or otherwise for a Competitive Business, wherever located; or
- (e) on behalf of yourself or any other person, or as an employee, proprietor, owner, consultant, agent, contractor, employer, affiliate, partner, officer, director or associate, or stockholder of any other person or entity, or in any other capacity, engage in or conduct any other business if you have any significant operational or management responsibility or obligation regarding such business, if such other business would interfere with your obligations under this Agreement to develop and operate your HydroDog business or otherwise (other than the HydroDog Businesses operated under franchise agreements with us), unless your HydroDog business is managed by a Chief Operating Officer, or equivalent position, approved by us, who has satisfactorily completed our training programs. This provision does not prohibit passive investments in other businesses that do not compete directly or indirectly with HydroDog business.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees face restrictions on their involvement with competitive businesses. The term "Competitive Business" is broadly defined as any entity involved in pet grooming, care, products, or services that are similar to what Hydrodog offers, including businesses that grant franchises or licenses to others.
Specifically, Hydrodog franchisees are prohibited from acting as an agent for a Competitive Business. This restriction extends not only to direct ownership or controlling interest in a competing business but also to indirect interests through family members or other relationships. The restrictions apply within the franchisee's territory, within 25 miles of the territory, and within 25 miles of any other Hydrodog business's territory.
Furthermore, franchisees are restricted from performing services for a Competitive Business in any capacity, including as a director, officer, manager, employee, consultant, representative, or agent, regardless of the business's location. Franchisees are also prohibited from engaging in any other business with significant operational or management responsibilities that would interfere with their obligations to Hydrodog, unless they have an approved Chief Operating Officer managing their Hydrodog business. Passive investments in non-competing businesses are permitted, but active roles such as director, officer, or majority stockholder are not.