How does the Hydrodog royalty fee in Item 6 compare to the initial franchise fee in Item 5?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
erage and payment of premiums as we request or accept; and
- (g) you have provided us with copies of all required documents pertaining to your acquisition and delivery of the HydroDog Vehicle.
6. FEES.
- 6.1 Initial Franchise Fee. In consideration of the Franchise rights granted in this Agreement, you must pay us a non-refundable initial franchise fee of Forty Thousand Dollars ($40,000) for a Territory with a population of up to one hundred fifty thousand (150,000) people (the "Initial Franchise Fee"). The Initial Franchise Fee is fully earned upon receipt. The Franchise Fee is due in a lump sum payment on the Agreement Date.
- 6.2 Additional Territory Fee. You may purchase additional territory rights for areas with populations of up to 50,000 each for an additional fee of ten thousand dollars ($10,000) per additional territory (the "Additional Territory Fee"). The Additional Territory Fee shall not be prorated if the population of the additional territory is less than 50,000.
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the initial franchise fee is a one-time payment of $40,000 for a territory with a population of up to 150,000 people. This fee is paid when signing the franchise agreement, is considered fully earned upon receipt, and is non-refundable. In contrast, the royalty fee is an ongoing weekly payment.
The Hydrodog royalty fee, as detailed in Item 6, is the greater of 7% of gross sales or $250 per territory. This royalty payment starts the week after the Hydrodog business opens and continues throughout the term of the agreement. Royalty payments are due every Monday for the previous calendar week.
In summary, the initial franchise fee is a large, upfront cost, while the royalty fee is a recurring weekly expense tied to the Hydrodog business's revenue or a minimum amount. A prospective franchisee should consider both these fees when evaluating the overall cost and profitability of a Hydrodog franchise.