Has the Hydrodog Marketing Fund been established yet?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
this Item (Franchise Agreement, Section 7).
Marketing Fund
We currently have a national marketing fund (the "Marketing Fund") for the common benefit of HydroDog franchisees. You currently must contribute 1% of your Gross Sales to the Marketing Fund in the manner we prescribe and participate in Marketing Fund program. We reserve the right to increase your Marketing Fund contribution to up to 2% of Gross Sales upon thirty (30) days' written notice to you. Franchisor and affiliate owned locations will contribute to the Marketing Fund on the same basis as franchisees. (Franchise Agreement, Section 12.1). The monies collected will be separately accounted for on our books and records. These sums are used for the benefit of all franchisees in order to promote and enhance the value of the System. We are not obligated, in administering the Marketing Fund, to make expenditures for you which are equivalent or proportionate to your contribution, or to ensure that any particular franchisee benefits directly or pro rata from expenditures by the Marketing Fund.
As the Franchisor, we maintain a National Marketing Program through the Marketing Fund to promote brand awareness and generate leads for all franchisees. We will direct all marketing programs financed by the Marketing Fund and will have sole discretion over the creative concepts, materials, and endorsements used and the geographic market and media placement and allocation. We will use an in-house advertising department, or national or regional advertising agencies. The Marketing Fund may be used to pay the costs of conducting marketing surveys and research; employing a public relations firm; preparing and producing video, audio, and written marketing materials;: (1) professionally designed social media graphics, templates, and national content calendar management; (2) targeted digital advertising on
platforms such as Meta (Facebook & Instagram), TikTok, and Google to drive appointment bookings and local business growth; (3) email & SMS marketing campaigns managed at the national level to enhance customer retention and engagement; (4) print marketing support, including flyers, banners, and promotional materials for local marketing needs; (5) influencer marketing initiatives featuring collaborations with pet influencers to enhance brand recognition and engagement; (6) special promotions tied to events such as National Dog Day and Adopt-a-Pet Month to generate higher visibility and bookings; (7) administering multi-regional marketing programs including, without limitation, purchasing television, radio, magazine, billboard, newspaper, and other media advertising; (8) employing advertising agencies; (9) providing marketing materials to franchises; and (10) holding conventions and regional meetings for franchisees.
The Marketing Fund will furnish you with approved marketing materials on the same terms and conditions as we furnish these materials to our other franchisees. The Marketing Fund will not use more than 5% for advertising that is principally a solicitation for the sale of franchises. We do not anticipate using over 20% for the above administrative items.
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.
We have the right, but not the obligation, to establish a Marketing Fund Advisory Committee ("Committee"), consisting of franchisees to advise and consult with us regarding the establishment, modification, continuance, or other decisions or considerations affecting marketing programs.
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, a national marketing fund (the "Marketing Fund") has been established for the common benefit of Hydrodog franchisees. Franchisees must contribute 1% of their gross sales to the Marketing Fund, and Hydrodog retains the right to increase this contribution to 2% with thirty days' written notice. Both franchisor and affiliate-owned locations contribute on the same basis as franchisees. The funds are separately accounted for and used to promote and enhance the Hydrodog system. However, Hydrodog is not obligated to ensure that expenditures benefit each franchisee proportionally to their contribution.
Hydrodog maintains a National Marketing Program through the Marketing Fund to promote brand awareness and generate leads. Hydrodog has sole discretion over the marketing programs, creative concepts, materials, endorsements, market placement, and media allocation. The marketing may be conducted through an in-house advertising department or external agencies. The Marketing Fund can cover costs for marketing surveys, public relations, video and audio materials, social media graphics, digital advertising, email and SMS campaigns, print marketing, influencer marketing, and multi-regional advertising.
The Marketing Fund will provide franchisees with approved marketing materials under the same terms as other franchisees. No more than 5% of the fund will be used for advertising that solicits franchise sales, and administrative costs are not expected to exceed 20%. Hydrodog is authorized to collect advertising monies, credits, rebates, or discounts from distributors and suppliers. Unless designated for advertising, Hydrodog can use these payments as they see fit. A statement of monies collected and expenditures made by the Marketing Fund will be prepared annually and provided to franchisees. Any unspent contributions are carried over to the next fiscal year. The document states that as the Marketing Fund is not yet established, there have been no expenditures and no contributions were collected in fiscal year 2024. This seems to contradict the earlier statement that a national marketing fund has been established.
Prospective franchisees should seek clarification from Hydrodog regarding the apparent contradiction about the Marketing Fund's establishment and contributions. Understanding the current status and planned activities of the Marketing Fund is crucial for assessing the value and support franchisees can expect for their marketing efforts.