Does HydroDog provide material benefits to franchisees based on their use of particular suppliers?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates negotiate purchase arrangements with suppliers (including price terms) for the benefit of our franchisees and our affiliates for the items and services that you may obtain only from approved suppliers. In doing so, we and our affiliates seek to promote the overall interests of the HydroDog Businesses system. We do not provide material benefits to you (for example, renewal or granting additional franchises) based on your purchase of particular products or services or use of particular suppliers.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–21)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog does not provide material benefits to franchisees based on their purchase of particular products or services or their use of particular suppliers. The FDD specifies that Hydrodog and its affiliates negotiate purchase arrangements with suppliers, including price terms, for the benefit of franchisees and affiliates, aiming to promote the overall interests of the HydroDog system. However, these negotiations do not translate into material benefits for individual franchisees, such as renewal options or the granting of additional franchises.
Hydrodog maintains a system of approved suppliers from whom franchisees must purchase a significant portion of their required items. The FDD states that approximately 70% to 100% of the total purchases and leases in establishing a HydroDog Business, and about 80% of the total purchases and leases in operating the business, must be made from Hydrodog, its affiliates, or approved suppliers, adhering to Hydrodog's System Standards. This requirement ensures consistency and quality across all franchise locations but does not provide direct material benefits to franchisees for using specific suppliers.
Hydrodog does receive rebates from certain suppliers, such as Groomer's Choice and Evan's Apparel, at a rate of 15% on purchases made by franchisees. However, these rebates are retained by Hydrodog to offset the costs of operating the franchise system and are not shared with the franchisees. This arrangement means that while Hydrodog benefits financially from franchisee purchases through approved suppliers, the franchisees themselves do not receive any direct material benefits in return.
Prospective franchisees should be aware that while Hydrodog negotiates with suppliers to benefit the overall system, there are no direct incentives or rewards for franchisees who use particular suppliers. The primary benefit to franchisees is the assurance of quality and consistency through the use of approved suppliers, but this does not translate into tangible benefits like discounts, rebates, or preferential treatment in franchise renewals or expansions.