How is the Hydrodog Marketing Fund Fee used?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee(1) | Amount(4) | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 7% of Gross Sales per week or $250 per week per Territory, whichever is greater | Payable on Monday of each week (the “Payment Day”) for the previous week's Gross Sales. (3) | Your first Royalty payment is due on the first Monday following your first week of business operations. Paid via automatic funds transfer (ACH). May be increased annually based on changes in the Consumer Price Index for All Urban Consumers (CPI-U), as published by the U.S. Department of Labor, or its successor index. |
| Marketing Fund Fee | 2% of Gross Sales. | Payable at the same time and in the same manner as the Royalty | The Marketing Fund Fee will be used for system-wide national or regional marketing activities, as we determine in our sole discretion, to promote and build the HydroDog brand. We maintain sole control over the Marketing Fund and all decisions regarding the use and distribution of Marketing Fund contributions. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the Marketing Fund Fee is used for system-wide national or regional marketing activities. This fee is set at 2% of Gross Sales. Hydrodog maintains sole control over the Marketing Fund and all decisions regarding the use and distribution of contributions to the fund.
For a prospective Hydrodog franchisee, this means that 2% of their weekly gross sales will be allocated to a marketing fund managed by Hydrodog. The funds are intended to promote and build the Hydrodog brand through national or regional marketing efforts. However, franchisees have limited input or control over how these marketing funds are spent, as Hydrodog has sole discretion over these decisions.
This arrangement is fairly typical in franchising, where franchisors often pool marketing funds to benefit the entire system. However, it's important for franchisees to understand that they are contributing to this fund and should inquire about the franchisor's marketing strategy and how the funds are allocated to ensure transparency and alignment with their business goals. Franchisees should also consider that the franchisor has the right to modify, add, or remove technology services as business needs evolve, in their sole discretion, and franchisees agree to comply with all such modifications and additions, including paying any associated increased fees.
While the FDD specifies the percentage of gross sales allocated to the marketing fund and its general purpose, it does not provide a detailed breakdown of how the funds are specifically spent. A prospective franchisee should ask Hydrodog for more detailed information on the marketing plan, examples of past marketing campaigns, and how the effectiveness of these campaigns is measured. Understanding the franchisor's marketing strategy and its potential impact on their business is crucial for making an informed investment decision.