Does Hydrodog have the right to set-off amounts owed to the franchisee from any amounts the franchisee owes to Hydrodog or its affiliates?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.15 Payment Offsets. You acknowledge and agree that we have the right to set-off from any amounts that we may owe you or your owners or any amount that you owe to us, or our affiliates, for any reason whatsoever, including without limitation, Royalties, Marketing Fund Fees, Late Payment Fees and interest on late payments, amounts owed to us or our affiliates for purchases or services or for any other reason.
Thus, payments that we or our affiliates may make to you may be reduced, in our discretion, by amounts that you owe to us or our affiliates from time-to-time.
We will notify you monthly if we elect to do so.
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 offset payments. Specifically, Hydrodog can deduct any amounts a franchisee owes to them or their affiliates from any payments Hydrodog or its affiliates might owe to the franchisee or the franchisee's owners. This includes, but is not limited to, royalties, marketing fund fees, late payment fees, interest on late payments, and amounts owed for purchases or services.
This means that if a Hydrodog franchisee is behind on royalty payments, for example, and Hydrodog owes the franchisee a rebate or refund for any reason, Hydrodog can reduce the amount of the rebate by the amount of the past-due royalties. This right extends to debts owed to Hydrodog's affiliates as well.
Hydrodog will notify the franchisee monthly if they choose to exercise this right of offset. This provides the franchisee with some level of transparency, but it's important to note that Hydrodog has sole discretion in applying these offsets.