Does Hydrodog require approval for all transfers of the franchise, even to a business entity controlled by the franchisee?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Other Agreement | Summary |
|---|---|---|
| of the Agreement Date; abandonment; unapproved transfers; conviction of or a plea of no contest to, a felony or other serious crime; dishonest or unethical conduct; unauthorized assignment of the Franchise Agreement or of an ownership interest in you or the HydroDog Business; loss of the HydroDog Vehicle; unauthorized use or disclosure of the Manuals or confidential information; failure to pay taxes, repeated defaults (even if cured); and bankruptcy. All non-curable defaults are subject to applicable state law. | ||
| (i) Franchisee's obligations on termination/ non renewal | Sections 17.1 - 17.4 | Obligations include payment of outstanding amounts, complete de-identification and return of confidential information (also see (r) below). |
| (j) Assignment of contract by franchisor | Sections 15.1, 15.4, 15.5 and 15.6 | No restriction on our right to assign. |
| (k) | Section 15.2 | Voluntary or involuntary, direct or indirect |
| "Transfer" by | assignment, sale, gift or other disposition of any | |
| franchisee - | interest in the Franchise Agreement, you or the | |
| defined | HydroDog Business. | |
| (l) Franchisor's approval of transfer by franchisee | Section 15.2 | We have the right to approve all transfers, even to a Business Entity controlled by you. |
| (m) Conditions for franchisor approval of transfer | Section 15.3 | New franchisee qualifies, you pay us all amounts due, transferee and its managerial employees agree to complete training, transferee agrees to be bound by terms and conditions of Franchise Agreement, our then current form of Franchise Agreement is signed and the then-current initial franchise fee is paid, we approve material terms, you subordinate amounts due to you, and you sign other documents we require - including general releases in the form provided in Exhibit "E" (also see r below). |
| (n) Franchisor's right of first refusal to acquire franchisee's business | Section 15.8 | We can match any offer for an ownership interest in you, your Franchise Agreement or your HydroDog Business provided that we may substitute cash for any form of payment at a discounted amount if an interest rate will be charged on any deferred payments, our credit will be deemed equal to that of any proposed purchaser, we will have no less than 60 days to prepare for closing and we receive all customary representations and warranties, as we specify. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 36–38)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog maintains the right to approve all franchise transfers, even if the transfer is to a business entity that the franchisee controls. This requirement is detailed within Item 17, which outlines the provisions related to the transfer of the franchise agreement.
This stipulation means that if a Hydrodog franchisee wishes to transfer their franchise to a corporation, LLC, or other business structure they own or control, they must still obtain Hydrodog's approval. This ensures that Hydrodog retains control over who operates their franchises and that the new entity meets their standards.
Hydrodog also specifies conditions for transfer approval. The new franchisee must meet Hydrodog's qualifications, all outstanding amounts owed by the current franchisee must be paid, the new franchisee and their managerial staff must complete the required training, the new franchisee must agree to the current franchise agreement terms, the current version of the franchise agreement must be signed along with payment of the current initial franchise fee, Hydrodog must approve the material terms of the transfer, the franchisee must subordinate any amounts owed to them, and both parties must sign any other required documents, including general releases. These conditions ensure that any transfer maintains the standards and financial obligations of the Hydrodog franchise system.
Furthermore, Hydrodog also retains the right of first refusal to acquire the franchisee's business. This means that before a franchisee can transfer their business to a third party, Hydrodog has the option to match any offer made for an ownership interest in the franchise. This provision allows Hydrodog to maintain control over its franchise locations and potentially consolidate ownership if it deems it beneficial.