What happens if a Hydrodog franchisee violates the competitive restrictions outlined in the agreement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, in the event that you violate any of the Competitive Restriction set forth in this Agreement, within 15 calendar days of such violation, you will pay us partial liquidated damages in the amount of our then-current initial franchise fee ("Competitive Liquidated Damages").
You agree that Competitive Liquidated Damages as calculated under this Section represent the best estimate the Franchisor would suffer for its costs and expenses of investigation and its internal non-legal costs to prepare to enforce its rights if you were to violate the Competitive Restriction set forth in this Agreement.
Your payment of the Competitive Liquidated Damages will not be considered a penalty, but instead a reasonable estimate of fair compensation to the Franchisor for some of, but not all of, the damages, costs and expenses it will incur if you violate the Competitive Restriction.
The Franchisor is also be entitled to recover all costs, including attorneys' fees incurred in connection with collection of Liquidated Damages as well as enforcing its rights.
Without limiting the foregoing, the Competitive Liquidated Damages will not be the Franchisor's exclusive remedy, will not prevent us from seeking other actual or consequential damages, injunctive relief enjoining future violations of the Competitive Restriction, nor will it in any way limit the Franchisor' right to assert that we have no adequate remedy at law in the event of breach.
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- Severability and Substitution.
You acknowledge and agree that these competitive restrictions will not unreasonably deprive you of your ability to earn a living or engage other business activities.
You and we agree that: (a) the time period, geographic area, and scope of the competitive restrictions contained in this Agreement are reasonably necessary to protect our localized efforts and the Franchisor's efforts to develop HydroDog Businesses throughout the U.S.; and (b) to the extent that any portion of this Agreement is deemed unenforceable by virtue of its scope, area, HydroDog activity, or duration, but may be made enforceable by modifying any or all thereof; this Agreement will be enforced to the fullest extent permissible under the laws or public policies of the jurisdiction in which enforcement is sought, and such modified provision will be enforced to the fullest extent.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if a franchisee violates any competitive restrictions outlined in the franchise agreement, they must pay partial liquidated damages equal to Hydrodog's then-current initial franchise fee within 15 calendar days of the violation. Hydrodog considers these damages a reasonable estimate of the costs and expenses it would incur for investigation and internal non-legal costs to prepare to enforce its rights.
Payment of these competitive liquidated damages is not considered a penalty but rather fair compensation to Hydrodog for some of the damages, costs, and expenses it will incur due to the violation. Additionally, Hydrodog is entitled to recover all costs, including attorneys' fees, incurred in connection with collecting liquidated damages and enforcing its rights.
However, the competitive liquidated damages are not Hydrodog's exclusive remedy. Hydrodog retains the right to seek other actual or consequential damages and injunctive relief to prevent future violations of the competitive restrictions. Hydrodog can also assert that it has no adequate remedy at law in the event of a breach. The agreement states that the competitive restrictions will not unreasonably deprive the franchisee of their ability to earn a living or engage in other business activities. The franchisee and Hydrodog agree that the time period, geographic area, and scope of the competitive restrictions are reasonably necessary to protect Hydrodog's localized efforts and its efforts to develop Hydrodog businesses throughout the U.S.
The agreement also states that if any portion of the agreement is deemed unenforceable due to its scope, area, Hydrodog activity, or duration, it will be enforced to the fullest extent permissible under the laws or public policies of the jurisdiction in which enforcement is sought. The agreement will be modified to the extent necessary to make it enforceable.