Can the Hydrodog Royalty Fee be increased, and if so, how?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee(1) | Amount(4) | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 7% of Gross Sales per week or $250 per week per Territory, whichever is greater | Payable on Monday of each week (the “Payment Day”) for the previous week's Gross Sales. (3) | Your first Royalty payment is due on the first Monday following your first week of business operations. Paid via automatic funds transfer (ACH). May be increased annually based on changes in the Consumer Price Index for All Urban Consumers (CPI-U), as published by the U.S. Department of Labor, or its successor index. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the Royalty Fee can be increased annually. The standard Royalty Fee is 7% of Gross Sales per week or $250 per week per Territory, whichever is greater. The FDD states that Hydrodog may increase this fee annually based on changes in the Consumer Price Index for All Urban Consumers (CPI-U), as published by the U.S. Department of Labor, or its successor index.
For a prospective Hydrodog franchisee, this means that the weekly royalty payments could increase over time, depending on the CPI-U. The CPI-U is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. If the CPI-U rises, the franchisee can expect to pay a higher royalty fee to Hydrodog.
It is important to note that the increase is tied to an external index (CPI-U), which is intended to reflect general economic inflation. Franchisees should monitor the CPI-U to anticipate potential changes in the royalty fee. While the FDD specifies that the royalty fee may be increased annually based on the CPI-U, it does not specify a maximum amount that the royalty fee can be increased. Franchisees should inquire about any limitations on the annual increase.