If a Hydrodog franchisee breaches the agreement, is the time period for restricted activities automatically extended?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
The 2025 Hydrodog Franchise Disclosure Document does not explicitly state that the time period for restricted activities is automatically extended if a franchisee breaches the agreement. However, the document does state that the competitive restrictions are in place to protect Hydrodog's localized efforts and the franchisor's efforts to develop HydroDog businesses throughout the U.S. The agreement also states that if any portion of the agreement is deemed unenforceable, it will be enforced to the fullest extent permissible under the laws.
Item 23 discusses receipts and mentions that if a franchisee violates any of the Competitive Restrictions, they will pay partial liquidated damages in the amount of the then-current initial franchise fee. The franchisee's payment of these damages will not be considered a penalty, but rather a reasonable estimate of fair compensation to Hydrodog for some of the damages, costs, and expenses it will incur if the franchisee violates the Competitive Restriction.
To fully understand the implications of breaching the agreement and whether the restricted activities period is extended, a prospective Hydrodog franchisee should seek clarification from the franchisor. Specifically, they should inquire about the specific circumstances under which the restricted period may be extended and the legal basis for such extensions.