What happens if a HydroDog franchisee violates the System Standards?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to follow the standards, specifications and operating procedures we establish periodically for the HydroDog System that are described in the Manuals.
You also must comply with all updates and amendments to the HydroDog System as described in newsletters or notices we distribute, including via Computer System or other media we select).
The Manuals may be modified or updated and revised periodically to reflect changes in System Standards.
You are responsible for routinely monitoring any on-line version (or electronic format) of the Manuals for changes to them.
If you nevertheless service the client in the Other Designated Territory, or fail to provide written notice to the Other Franchisee and we as required by this Section, you shall be in violation of this Agreement.
In such a case, we shall provide written notice to you, and within ten (10) days of receiving written notice of such violation, you: (i) must, within forty-eight (48) hours, cease providing services to the client in the Other Designated Territory, except for any pre-scheduled appointments within the next seven (7) days which may be completed to maintain customer goodwill; and (ii) may be required to pay an encroachment fee of five hundred dollars ($500) to us and five hundred dollars ($500) to the Other Franchisee.
Additionally, if you engage in three (3) or more unauthorized territorial encroachments during any twelve (12) consecutive month period, such repeated violations shall constitute a material breach of this Agreement and may result in immediate termination of this Agreement at our sole discretion.
We may, in our sole and absolute discretion, choose to grant you an opportunity to cure the non-compliance prior to imposing the Non-Compliance Fee or pursuing other remedies, but we have no obligation to do so and our choice to grant a cure opportunity in one instance does not require us to do so in any other instance.
We have the right to make personal visits without notice to your HydroDog Business.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, failure to comply with System Standards can result in penalties. The System Standards are the specifications, standards, operating procedures, and rules prescribed in the HydroDog Operations Manuals. These manuals contain mandatory and suggested guidelines for operating a HydroDog Business, and franchisees must adhere to any updates or amendments distributed via newsletters, computer systems, or other media. Franchisees are responsible for monitoring online versions of the manuals for changes.
One specific violation of the agreement is encroaching on another franchisee's territory. If a Hydrodog franchisee services a client in another franchisee's designated territory without written permission from both the other franchisee and Hydrodog, the franchisee is in violation of the agreement. In such cases, Hydrodog will provide written notice, and the franchisee must cease providing services to the client within 48 hours (with an exception for pre-scheduled appointments within the next seven days). The franchisee may also be required to pay an encroachment fee of $500 to Hydrodog and $500 to the other franchisee.
Furthermore, repeated violations, defined as three or more unauthorized territorial encroachments within any 12-month period, constitute a material breach of the Franchise Agreement. This can result in immediate termination of the agreement at Hydrodog's discretion. Hydrodog also has the right to make personal visits without notice to a franchisee's HydroDog Business to verify compliance.
Hydrodog may choose to grant a franchisee an opportunity to correct the non-compliance before imposing a Non-Compliance Fee or pursuing other remedies, but Hydrodog is not obligated to do so. This means that franchisees should be diligent in adhering to all System Standards to avoid potential penalties, including termination of the franchise agreement.