How does Hydrodog handle the cost of assets when they are sold, retired, or otherwise disposed of?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Purchase Price. The purchase price for the Business will be its fair market value, determined in a manner consistent with reasonable depreciation of the Business's equipment, signs, inventory, materials and supplies; provided that the Business will be valued as an independent business and its value will not include any value for:
- (i) The Franchise or any rights granted by this Agreement;
- (ii) The Marks or Copyrights; or
- (iii) Participation in the network of the HydroDog Businesses.
Your HydroDog Business' fair market value will include the goodwill you developed in the market of your HydroDog Business that exists independent of the goodwill of the Marks and the System. The length of the remaining term of the lease for the HydroDog Vehicle will also be considered in determining your HydroDog Business's fair market value. At our option, we may substitute our repurchase right payment at fair market value of the HydroDog Vehicle, and receive credit for such payment.
We reserve the right to exclude from the assets purchased cash or its equivalent and any equipment, signs, inventory, materials, and supplies that are not reasonably necessary (in function or quality) for the operation of the HydroDog Business, or that do not meet our standards for the HydroDog Businesses. The purchase price will be adjusted accordingly to reflect such exclusions.
(d) Appraisal. If we and you are unable to agree on your HydroDog Business's fair market value, its fair market value will be determined by three (3) independent appraisers who collectively will conduct one (1) appraisal. We will appoint 1 appraiser, you will appoint one (1) appraiser and the two (2) party appointed appraisers will appoint the third (3rd) appraiser. You and we agree to select our respective appraisers within fifteen (15) days after we notify you that we are exercising our option to purchase your HydroDog Business, and the two (2) appraisers so chosen are obligated to appoint the third (3rd) appraiser within fifteen (15) days after the date on which the last of the two (2) party-appointed appraisers was appointed. You and we will bear the cost of our own appraisers and share equally the fees and expenses of the third (3rd) appraiser chosen by the two (2) party-appointed appraisers. The appraisers are obligated to complete their appraisal within thirty (30) days after the third (3rd) appraiser's appointment.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
Based on the 2025 Hydrodog Franchise Disclosure Document, the purchase price for the business, when Hydrodog exercises its right to purchase the franchise, will be the fair market value. This value is determined in a manner consistent with reasonable depreciation of the business's equipment, signs, inventory, materials, and supplies. The business will be valued as an independent entity, excluding any value associated with the franchise rights, trademarks, or participation in the Hydrodog network.
If Hydrodog and the franchisee cannot agree on the fair market value, it will be determined by three independent appraisers. Each party will appoint one appraiser, and the two appraisers will then appoint a third. The franchisee and Hydrodog will each bear the cost of their own appraiser and share the expenses of the third appraiser. The appraisers are required to complete their appraisal within thirty days of the third appraiser's appointment.
Hydrodog reserves the right to exclude certain assets from the purchase, such as cash or its equivalent, and any equipment, signs, inventory, materials, and supplies that are not reasonably necessary for the operation of the Hydrodog Business or do not meet Hydrodog's standards. The purchase price will be adjusted to reflect these exclusions. The fair market value will include the goodwill developed in the market of the Hydrodog Business that exists independent of the goodwill of the Marks and the System. The length of the remaining term of the lease for the HydroDog Vehicle will also be considered in determining the business's fair market value. Hydrodog has the option to substitute its repurchase right payment at fair market value of the HydroDog Vehicle and receive credit for such payment.