If suppliers designate payments specifically for advertising and promotion, where will Hydrodog contribute these payments?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Franchise Agreement, you authorize us to collect any advertising monies or credits due from any of your distributors or other suppliers and any advertising or other rebates or any discounts from distributors and other suppliers based upon purchases or volume purchases by us and our franchisees (including purchases by you). We have the right to negotiate with suppliers, to obtain price reductions, discounts or rebates based on volume purchases. Unless these suppliers designate these payments specifically for advertising and promotion (in which case we will contribute them to the Marketing Fund), we can use these payments as we see fit. Any amounts contributed to the Marketing Fund will be in addition to all other amounts due or contributed under the Franchise Agreement. The Marketing Fund will not be audited. A statement of monies collected and expenditures made by the Marketing Fund will be prepared annually by us and will be provided to you. Any Marketing Fund contributions not spent in the fiscal year in which they accrue are carried over to the next fiscal year. As the Marketing Fund is not yet established, there have been no expenditures. No Marketing Fund contributions were collected in fiscal year 2024.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–30)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if Hydrodog receives advertising monies or credits from distributors or suppliers that are specifically designated for advertising and promotion, Hydrodog will contribute these funds to the Marketing Fund. Hydrodog has the right to negotiate with suppliers for price reductions, discounts, or rebates based on volume purchases. However, unless suppliers specifically earmark these payments for advertising and promotion, Hydrodog can use these payments as they see fit.
Any amounts contributed by Hydrodog to the Marketing Fund will be in addition to all other amounts due or contributed under the Franchise Agreement. The Marketing Fund is used for the benefit of all franchisees to promote and enhance the value of the Hydrodog system.
The Marketing Fund is not audited; however, Hydrodog will prepare an annual statement of monies collected and expenditures made by the Marketing Fund and provide it to franchisees. Any Marketing Fund contributions not spent in the fiscal year in which they accrue are carried over to the next fiscal year. As of the FDD's publication, the Marketing Fund had not yet been established, so there have been no expenditures, and no Marketing Fund contributions were collected in fiscal year 2024.