Are Hydrodog franchisees prohibited from being a 'member' or 'manager' 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. However, an interest in a business in which your capacity is either a director, officer or majority stockholder (or any combination thereof) does not constitute a passive investment, and will be considered a breach of these provisions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees face restrictions regarding involvement with competitive businesses. The term "Competitive Business" is broadly defined as any business involved in pet grooming, care, products, or services that are similar to those offered by Hydrodog, excluding other Hydrodog franchises.
The FDD states that franchisees are prohibited from having a direct or indirect interest as a disclosed or beneficial owner in a Competitive Business. This restriction extends to acting as a member or manager in a Competitive Business, especially if that business operates within the franchisee's territory, within 25 miles of that territory, or within 25 miles of any other Hydrodog Business's territory. These restrictions apply during the term of the franchise agreement and may extend beyond termination or expiration of the agreement.
Furthermore, franchisees are prohibited from performing services as a director, officer, Manager, employee, consultant, representative, or agent for a Competitive Business, regardless of its location. There is a limited exception for passive investments in businesses that do not directly or indirectly compete with Hydrodog, but this exception does not apply if the franchisee is a director, officer, or majority stockholder in the competing business. These restrictions are designed to protect Hydrodog's market position and confidential information by preventing franchisees from using their knowledge and resources to benefit competing businesses.