Are Principal Owners of a Hydrodog franchise required to sign a Principal Owner's Guaranty?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
urnish such other information about your organization or formation as we may request (no ownership changes may be made without our approval);
- (e) each of your owners during the Term will sign and deliver to us our standard form of Principal Owner's Guaranty undertaking to be bound jointly and severally by all provisions of this Agreement and any other agreements between you and us, and any
amendments or modifications thereto. A copy of our current form of Principal Owners Guaranty is attached to the Franchise Disclosure Document; and
- (f) at our request, you will furnish true and correct copies of all documents and contracts governing the rights, obligations and powers of your owners and agents (like articles of incorporation or organization and partnership, operating or shareholder agreements).
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if the franchisee is a business entity, each owner must sign a Principal Owner's Guaranty. Specifically, each owner must agree to be bound jointly and severally by all provisions of the Franchise Agreement and any other agreements between the franchisee and Hydrodog, including any amendments or modifications. A copy of the current form of Principal Owner's Guaranty is attached to the Franchise Disclosure Document as Exhibit B.
This requirement ensures that Hydrodog can hold the individual owners of a business entity personally responsible for the franchise's obligations. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case of default or breach of contract by the franchisee. The Principal Owner's Guaranty essentially makes the owners personal assets at risk if the Hydrodog franchise fails to meet its financial or contractual obligations.
Furthermore, the FDD states that a Principal Owner is defined as someone with at least a twenty percent ownership interest in the Hydrodog Business Entity. This Principal Owner must have management responsibility and authority over the business on a day-to-day basis, be actively employed on a full-time basis to manage the Hydrodog Business's operations, and be present at the Hydrodog Business for at least fifty percent of the hours the business is open to the public. They must also be bound by Hydrodog's then-current form of Confidentiality Agreement and satisfactorily complete Hydrodog's initial training program and any other training programs requested during the term.
Prospective Hydrodog franchisees should carefully review the Principal Owner's Guaranty and understand the full extent of their personal liability before signing the Franchise Agreement. They should also consult with an attorney or financial advisor to assess the risks and implications of providing such a guarantee.