Does the Principal Owner's Guaranty for a Hydrodog franchise bind the owners jointly and severally to the Franchise Agreement?
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, each Principal Owner must sign a Principal Owner's Guaranty, which makes them jointly and severally bound by the Franchise Agreement. This requirement applies to owners of a Hydrodog Business Entity. A Principal Owner is defined as someone with at least a 20% ownership interest.
This means that each owner signing the guaranty is responsible for all obligations under the Franchise Agreement. If Hydrodog suffers damages due to a breach of contract, they can pursue any or all of the owners for the full amount of the damages, regardless of their individual ownership percentage or involvement in the specific breach. This is a significant obligation, as it potentially exposes each owner to liability for the actions of the other owners.
For a prospective Hydrodog franchisee, this highlights the importance of carefully choosing business partners. Because of the joint and several liability, the financial stability and business practices of each owner can directly impact the others. It would be prudent to seek legal counsel to fully understand the implications of the Principal Owner's Guaranty before signing the Franchise Agreement.
Hydrodog also requires that the Principal Owner has management responsibility, is actively employed full-time, is present at the business for at least 50% of operating hours, is bound by a Confidentiality Agreement, and completes the initial training program. These requirements ensure that the Principal Owners are actively involved in the business and are committed to upholding the standards of the Hydrodog franchise system.