Are the monies collected for the Hydrodog Marketing Fund accounted for separately?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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, the monies collected for the Marketing Fund will be separately accounted for on the company's books and records. This fund is intended to benefit all franchisees by promoting and enhancing the value of the Hydrodog system. Franchisees are currently required to contribute 1% of their gross sales to the Marketing Fund, and Hydrodog retains the right to increase this contribution to up to 2% with thirty days written notice. Hydrodog and affiliate-owned locations contribute to the Marketing Fund on the same basis as franchisees.
Hydrodog maintains a National Marketing Program through the Marketing Fund to promote brand awareness and generate leads for all franchisees. Hydrodog has sole discretion over the marketing programs financed by the fund, including creative concepts, materials, endorsements, geographic market, and media placement. The marketing programs may include marketing surveys and research, public relations, video, audio, and written marketing materials, social media graphics, digital advertising, email and SMS marketing campaigns, print marketing support, and influencer marketing initiatives.
The Marketing Fund will furnish franchisees with approved marketing materials on the same terms and conditions as other franchisees. No more than 5% of the Marketing Fund will be used for advertising that is principally a solicitation for the sale of franchises, and Hydrodog does not anticipate using over 20% for administrative items. The Marketing Fund will not be audited. A statement of monies collected and expenditures made by the Marketing Fund will be prepared annually by Hydrodog and provided to franchisees. 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, and no Marketing Fund contributions were collected in fiscal year 2024.
Hydrodog has the right, but not the obligation, to establish a Marketing Fund Advisory Committee consisting of franchisees to advise and consult with Hydrodog regarding the marketing programs. However, Hydrodog retains sole discretion over all aspects of the Marketing Fund, including administration and use.