What are the liabilities upon default of Hydrodog's financing agreement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| Parameter | Initial Franchise Fee and for additional territories |
|---|---|
| Item Financed (1) | Up to 50% of the Initial Franchise Fee |
| Source of Financing | Us |
| Down Payment | $20,000 |
| Amount Financed | Up to 50% |
| Interest Rate/Finance Charge | 8% per annum (including finance charges) |
| Period of Repayment | 60 months |
| Security Required | Personal Guarantee |
| Whether a Person Other than the Franchisee Must Personally Guarantee the Debt (2) | If the franchisee is an entity, its owners must personally guarantee the debt |
| Prepayment Penalty | None |
| Liability Upon Default | Accelerated obligation to pay the entire amount due, pay our court costs and attorney fees incurred in collecting the debt, and termination of the franchise. |
| Waiver of Defenses or Other Legal | Waiver of right to a jury trial; homestead and other exemptions; |
| Rights | waiver of presentment, demand, protest, notice of dishonor. |
| Intent to Sell (3) | There is no intent to sell, assign or factor the debt to a third party. |
| Consideration for placement of | None |
| financing (4) |
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 a franchisee defaults on their financing agreement with Hydrodog, they face several liabilities. The franchisee will be obligated to immediately pay the entire remaining balance due. Additionally, the franchisee is responsible for covering Hydrodog's court costs and attorney fees incurred while attempting to collect the debt. Finally, Hydrodog has the right to terminate the franchise agreement upon default.
Hydrodog requires a personal guarantee as security for the financing. This means that if the franchisee is an entity, its owners must personally guarantee the debt. This ensures that Hydrodog can pursue the personal assets of the owners if the business entity defaults on the loan. This is a common practice in franchising, as it provides the franchisor with an additional layer of security.
It is important to note that the financing offered by Hydrodog covers up to 50% of the initial franchise fee. The interest rate is 8% per annum, including finance charges, and the repayment period is 60 months. There is no prepayment penalty, which allows franchisees to pay off the loan early without incurring additional charges. Hydrodog does not intend to sell, assign, or factor the debt to a third party, and there is no consideration for the placement of financing.