Can Hydrodog refuse a franchisee's participation in Preferred Vendor Programs without terminating the Franchise Agreement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
You must follow all of our policies and procedures which we designate from time-to-time for participation in or termination of Preferred Vendor Programs ("Program Rules").
We can refuse or terminate your participation in Preferred Vendor Programs without terminating this Agreement.
We may designate one or more Approved Suppliers ("Preferred Vendors") as an exclusive supplier of types, models or brands of business materials, supplies, operating assets, consumer goods, fixtures or materials and business services that we approve for the HydroDog Businesses.
We may receive compensation from Approved Suppliers, fees, rebates or other consideration for such purchases.
Certain Preferred Vendors may require that you enter into agreements with them (subject to our approval) in connection with our designation or your use of them as a Preferred Vendor or participation in their Preferred Vendor Program ("Preferred Vendor Agreements").
You agree to do so.
We may be a party to such Preferred Vendor Agreements.
We may, but are not obligated to, contribute any such fees or rebates received by us from such agreements to the Marketing Fund.
However, with respect to such contributions to the Marketing Fund, if any, we will not be obligated to offset or reduce your obligation to pay to us Marketing Fund Fees.
If we permit you to receive any form of rebates, contributions or remunerations from Preferred Vendors, we may require that you provide to us accountings of such monies or other remuneration you receive, in the manner we designate in the Manuals.
We may charge you fees in the amount we may designate from timeto-time for participating in Preferred Vendor Programs which we evaluate or for which we
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog can refuse or terminate a franchisee's participation in Preferred Vendor Programs without terminating the Franchise Agreement. The FDD states that franchisees must adhere to Hydrodog's policies and procedures regarding participation in or termination of these programs, referred to as "Program Rules."
This means that Hydrodog franchisees may be required to use specific suppliers designated by Hydrodog, and Hydrodog has the right to develop, modify, and terminate these Preferred Vendor Programs. Hydrodog also reserves the right to negotiate benefits or terms from Approved Suppliers for itself, its affiliates, or the Hydrodog Businesses.
For a prospective franchisee, this indicates that Hydrodog has significant control over the supply chain and vendor relationships. While this could potentially lead to cost savings or better terms through negotiated benefits, it also limits the franchisee's autonomy in choosing suppliers. It is important for potential franchisees to understand the Program Rules and any agreements they may be required to enter into with Preferred Vendors, as well as any fees Hydrodog may charge for participating in these programs.