Can the Hydrodog Marketing Fund be used to defray general operating expenses?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
eting Fund may periodically furnish you with samples of advertising, marketing and promotional formats and materials at no cost. Multiple copies of such materials may be furnished to you at our direct cost of producing them, plus any related shipping, handling and storage charges.
- 12.3 Accounting for the Fund. The Marketing Fund may be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for such reasonable salaries, administrative costs, travel expenses and overhead as we may incur in activities related to the administration of the Marketing Fund and its programs, including, without limitation, conducting market surveys, preparing advertising, promotion and marketing materials and collecting and accounting for contributions to the Marketing Fund. We may spend on behalf of the Marketing Fund, in any fiscal year an amount greater or less than the aggregate contribution of all the HydroDog Businesses to the Marketing Fund in that year, and the Marketing Fund may borrow from us or others to cover deficits or invest any surplus for future use. In addition to other Marketing Fund fees, we may assess you, and you must pay to the Marketing Fund such Marketing Fund fees as we or the Fund deems necessary to address any deficits or special needs of the Marketing Fund. All interest earned on monies contributed to the Marketing Fund will be used to pay System Development costs before other assets of the Marketing Fund are expended. We may prepare a periodic statement of monies collected and costs incurred by the Marketing Fund and furnish the statement to you upon written request. We have the right to cause the Marketing Fund to be incorporated or operated through a separate entity at such time as we deem appropriate, and such successor entity will have all of the rights and duties specified in this Agreement.
- 12.4 Marketing Fund Limitations. The Marketing Fund will be intended to maximize recognition of the Marks and patronage of the HydroDog Businesses.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the Marketing Fund may be accounted for separately from Hydrodog's other funds. While the fund is primarily for marketing and promotion, it can be used to cover reasonable salaries, administrative costs, travel expenses, and overhead that Hydrodog incurs while administering the Marketing Fund and its related programs. These programs include conducting market surveys, preparing advertising, promotion and marketing materials, and collecting and accounting for contributions to the Marketing Fund.
Hydrodog may spend more or less than the aggregate contributions from all HydroDog businesses in any fiscal year. To cover deficits, the Marketing Fund may borrow from Hydrodog or others, and any surplus may be invested for future use. Hydrodog may also assess franchisees additional Marketing Fund fees to address deficits or special needs of the fund.
Interest earned on the Marketing Fund will first be used to pay System Development costs before being used for other purposes. Hydrodog has the right to incorporate the Marketing Fund or operate it through a separate entity. Hydrodog aims to maximize recognition of its Marks and patronage of HydroDog Businesses through the Marketing Fund. However, Hydrodog does not guarantee that expenditures in any geographic area will be proportionate to the contributions from HydroDog Businesses in that area, or that any HydroDog Business will directly benefit in proportion to its contribution.