Does a sale of assets by Hydrodog affect the franchisee's obligations under the Franchise Agreement?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.1 By Us. We have the exclusive right to transfer or assign this Agreement or any part of our rights or obligations under this Agreement to any person or legal entity, without your prior consent. You agree that we will have no liability after the effective date of the transfer or assignment for the performance of any obligations under this Agreement, unless otherwise stipulated in the terms of the transfer or assignment. You acknowledge that we can sell our assets; sell securities in a public offering or in a private placement; merge with, acquire, or be acquired by another company; or undertake a refinancing, recapitalization, leveraged buy-out, or other economic or financial restructuring, without restriction and without affecting your obligations under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, a sale of assets by Hydrodog does not affect the franchisee's obligations under the Franchise Agreement. Hydrodog retains the right to sell its assets, sell securities, merge, acquire, or undergo financial restructuring without affecting the franchisee's obligations.
This means that even if Hydrodog changes ownership or undergoes significant financial changes, the franchisee is still bound by the terms of the Franchise Agreement. The franchisee cannot use a sale of assets or other corporate restructuring as a reason to terminate or modify their obligations under the agreement. This protects Hydrodog by ensuring franchisees continue to operate their businesses according to the agreement, regardless of changes in Hydrodog's corporate structure.
This provision is fairly standard in franchising. It allows the franchisor to maintain flexibility in its business operations without disrupting the franchise system. However, it also places the risk on the franchisee, who must continue to meet their obligations even if the franchisor's business practices or financial stability change. Prospective franchisees should carefully consider this provision and assess their comfort level with the potential for changes in Hydrodog's ownership or financial structure.