What position must manage the Hydrodog business if the franchisee engages in another business?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) on behalf of yourself or any other person, or as an employee, proprietor, owner, consultant, agent, contractor, employer, affiliate, partner, officer, director or associate, or stockholder of any other person or entity, or in any other capacity, engage in or conduct any other business if you have any significant operational or management responsibility or obligation regarding such business, if such other business would interfere with your obligations under this Agreement to develop and operate your HydroDog business or otherwise (other than the HydroDog Businesses operated under franchise agreements with us), unless your HydroDog business is managed by a Chief Operating Officer, or equivalent position, approved by us, who has satisfactorily completed our training programs. This provision does not prohibit passive investments in other businesses that do not compete directly or indirectly with HydroDog business. However, an interest in a business in which your capacity is either a director, officer or majority stockholder (or any combination thereof) does not constitute a passive investment, and will be considered a breach of these provisions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if a franchisee has significant operational or management responsibility in another business that could interfere with their Hydrodog obligations, the Hydrodog business must be managed by a Chief Operating Officer (or equivalent position). This COO must be approved by Hydrodog and must have satisfactorily completed Hydrodog's training programs. This condition does not prevent franchisees from making passive investments in other businesses that do not directly or indirectly compete with Hydrodog. However, holding a position as a director, officer, or majority stockholder in another business does not qualify as a passive investment and would be considered a breach of the franchise agreement.
This requirement ensures that the Hydrodog business receives the franchisee's full attention and is not negatively impacted by outside business interests. By mandating an approved and trained COO, Hydrodog aims to maintain consistent operational standards and protect its brand reputation.
For a prospective franchisee, this means that if they plan to be actively involved in managing another business, they must be prepared to hire a qualified COO to oversee the daily operations of their Hydrodog franchise. This will add to the operational costs and require finding a candidate that meets Hydrodog's approval and training standards. It is important to note that Hydrodog has the right to determine whether another business interferes with the franchisee's obligations.