If Hydrodog determines a Customer Account Transfer Fee, is that determination binding on both franchisees?

According to Hydrodog's 2025 Franchise Disclosure Document, if two franchisees cannot agree on a Customer Account Transfer Fee within 30 days of the initial written request, Hydrodog has the right, but not the obligation, to determine a reasonable Customer Account Transfer Fee. This determination is binding on both franchisees involved in the potential transfer.

This means that if a Hydrodog franchisee wants to acquire customer accounts from another franchisee's territory, they must first request to purchase those rights. The other franchisee is not obligated to sell, and Hydrodog is not obligated to facilitate the sale. If the selling franchisee agrees, the two franchisees must agree on a Customer Account Transfer Fee.

However, if the franchisees cannot agree on a fee within 30 days, Hydrodog can step in and set a fee that both franchisees must accept. This clause ensures that disputes over customer accounts can be resolved, and it prevents one franchisee from holding up a transfer by demanding an unreasonable fee. This process provides a mechanism for Hydrodog to maintain control over its brand and customer relationships, even when those relationships cross franchise territory boundaries.