Does Hydrodog have the obligation to procure insurance if the franchisee fails to do so?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
require you to license or to modify or obtain new software that we or our affiliates license to you, you must pay us, or our designee, our, or our designee's, then-current fees for such software, including any up-front and ongoing fees.
- 6.17 Insurance Reimbursement. Should you, for any reason, not procure and maintain such insurance coverage as required by this Agreement, we shall have the right and authority (without, however, any obligation to do so) to immediately procure such insurance coverage and to charge same to you, which charges, together with a five hundred dollar ($500) administrative fee for our expenses and efforts in connection with such procurement, shall be payable by you immediately upon notice.
- 6.18 Non-Compliance Fee. In the event you are, at any time during the term of this Agreement, found to not be in compliance with the terms hereof and/or the System Standards or this Agreement and have failed to cure such failure within the stated cure period herein, you agree to pay to us two hundred fifty dollars ($250) the first time you are found to not be in-compliance with the System; five hundred dollars ($500) for the second time you are found to not be in-compliance with the System; and seven hundred fifty dollars ($750) for the third and any subsequent times you are found to not be in-compliance with the System. Our election to impose non-compliance fees shall not waive or limit any other rights or remedies we may have under this Agreement, including but not limited to our right to later terminate this Agreement for the same or different breaches.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, while Hydrodog does not have an obligation to procure insurance for franchisees, it does reserve the right to do so under certain circumstances. Specifically, if a franchisee fails to maintain the required insurance coverage or provide satisfactory evidence of coverage and premium payments, Hydrodog has the right to obtain the necessary insurance on the franchisee's behalf.
If Hydrodog exercises this right, the franchisee is obligated to fully cooperate, sign all required forms, and allow any necessary inspections of their HydroDog Business. Furthermore, the franchisee is responsible for promptly paying all costs and premiums incurred by Hydrodog in obtaining the insurance.
It is important to note that even if Hydrodog obtains insurance on behalf of the franchisee, this does not reduce or absolve the franchisee of their indemnification obligations as outlined in the agreement. Additionally, Hydrodog has the right to procure such insurance coverage and charge it to the franchisee, along with a $500 administrative fee for their expenses and efforts.