Does the restriction on competitive businesses prohibit passive investments in other businesses that do not compete with the Hydrodog business?

According to Hydrodog's 2025 Franchise Disclosure Document, the restrictions on competitive businesses do not prohibit passive investments in businesses that do not directly or indirectly compete with Hydrodog. However, if the franchisee holds a position as a director, officer, or majority stockholder in another business, it does not qualify as a passive investment and will be considered a breach of the agreement.

This means that a Hydrodog franchisee can invest in other businesses, as long as those businesses are not competitive with Hydrodog's services and products. The definition of a "Competitive Business" includes any business that offers pet grooming, pet care, pet products, or services similar to those offered by Hydrodog. This definition extends to businesses that grant franchises or licenses for such services, as well as mobile, fixed, internet, or catalog-based businesses in the pet industry.

For a Hydrodog franchisee, this clause provides some flexibility to diversify investments. However, it's crucial to avoid any active role or significant ownership in a competing business, as this would violate the franchise agreement. The franchisee should carefully consider the nature of any potential investment to ensure it remains passive and non-competitive to avoid potential conflicts with the Hydrodog franchise agreement.