Does Hydrodog have the right to require audited financial statements for my Hydrodog Business?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
ments; and (ii) a balance sheet for your HydroDog Business as of the end of such fiscal year; and
- (d) within ten (10) days after our request: (i) exact copies of federal and state income and other tax returns; and (ii) such other forms, records, books and other information we may periodically require.
- 13.3 Access to Information. You agree to verify and sign each report and financial statement in the manner we prescribe. We have the right to disclose data derived from such reports without identifying you or the location of your HydroDog Business. We also have the right to require you to have reviewed or audited financial statements prepared on an annual basis if we reasonably believe that the reports are incorrect. Moreover, we have the right, as often as we deem appropriate (including on a daily basis), to access all computer registers and other Computer Systems that you are required to maintain in connection with the operation of your HydroDog Business and to retrieve all information relating to your HydroDog Business's operations.
- 13.4 Copies of Reports. You agree to furnish us with a copy of all sales, income and other tax returns relating to your HydroDog Business, at our request. You will also send us copies of any sales or other reports sent to any landlord or governmental agency, at our request.
14. INSPECTIONS AND AUDITS
- 14.1 Our Right to Inspect your HydroDog Business.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog has the right to request reviewed or audited financial statements from its franchisees. Specifically, Hydrodog can require these statements on an annual basis if they reasonably believe that the reports franchisees are providing are incorrect.
In addition to the right to request reviewed or audited financial statements, Hydrodog also has broad access to a franchisee's financial and operational data. Hydrodog can prescribe the bookkeeping and accounting systems a franchisee must use and can mandate the use of specific computer hardware and software. Hydrodog also has the right to real-time, continuous, and unrestricted access to all sales data, customer information, financial records, and other business information through the franchisee's computer system.
Hydrodog also has inspection and audit rights. Hydrodog has the right to inspect and audit a franchisee's business, bookkeeping, and accounting records with three days' notice. If an audit is required because a franchisee failed to furnish required reports or if the provided information is inaccurate (understating Gross Sales by 2% or more), the franchisee must reimburse Hydrodog for the cost of the audit, including attorney and accountant fees, travel expenses, and employee compensation.