Is making an unauthorized assignment of the Franchise Agreement prohibited for a Hydrodog franchisee?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.18 Binding Effect. This Agreement is binding on and will inure to the benefit of our successors and assigns. Except as otherwise provided in this Agreement, this Agreement will also be binding on your successors and assigns, and your heirs, executors and administrators. However, any assignment of this Agreement by you must be approved by us in writing.
The Summary column of Item 17 row (m) of this disclosure document and Section 15.3 of the Franchise Agreement are amended to remove the requirement that the Franchisor have the right to approve the material terms as a condition to transfer.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, a franchisee cannot assign their Franchise Agreement without written approval from Hydrodog. While the agreement is binding on the franchisee's successors and assigns, any assignment by the franchisee requires the franchisor's explicit written consent.
This requirement is standard practice in franchising, allowing Hydrodog to maintain control over who operates a franchise under its brand. By requiring approval, Hydrodog can ensure that any new franchisee meets its standards for business acumen, financial stability, and commitment to the brand. This protects the overall reputation and consistency of the Hydrodog franchise system.
However, an amendment to the Franchise Agreement states that the Summary column of Item 17 row (m) of this disclosure document and Section 15.3 of the Franchise Agreement are amended to remove the requirement that the Franchisor have the right to approve the material terms as a condition to transfer. This amendment may provide more flexibility for franchisees looking to transfer their business, but it's important to note that the assignment is still subject to Hydrodog's right of first refusal.
Prospective franchisees should carefully review Section 21.18 of the Franchise Agreement and Item 17 row (m) of the disclosure document, paying close attention to the conditions under which assignment is permitted or restricted. Understanding these terms is crucial for franchisees planning for future business transitions or sales.