What secures the $150,000 note receivable that Hydrodog has with a related party?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| State | Name | Address | Telephone | Year Left System | |
|---|---|---|---|---|---|
| Arizona | Road Dawg, LLC | Unknown | Unknown | 2024 | |
| Louisiana | Scott McInnis | Unknown | Unknown | 2024 | |
| Texas | Marcus Gray | 4310 Brownstone Dr., Beaumont, TX 77706 | 352-484-6984 | 2024 | #### Notes Receivable: |
On January 31, 2023, the Company entered into a $150,000 secured note receivable with a related party bearing interest at 6.5% per annum. Interest only payments began on March 1, 2023, and are due on the first day of each month thereafter, until February 1, 2025, at which time the remaining principal balance, together with any accrued but unpaid interest became due. The note is secured by certain real estate of the related party. The note receivable has not been repaid as of the date of these audited financial stat
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, a $150,000 note receivable with a related party is secured by certain real estate of the related party. The note, entered on January 31, 2023, bears interest at 6.5% per annum, with interest-only payments due monthly from March 1, 2023, until February 1, 2025, when the principal balance and any accrued interest were due.
As of the date of the audited financial statements, the note receivable had not been repaid. The outstanding amount, including accrued interest, was $168,688 at December 31, 2024, and $158,938 at December 31, 2023.
For a prospective Hydrodog franchisee, this information indicates that Hydrodog has engaged in financial transactions with related parties, and that these transactions are secured by real estate. While this arrangement itself isn't inherently negative, it's prudent for potential franchisees to inquire about the nature of the related party, the details of the real estate serving as collateral, and the potential implications if the note is not repaid. Understanding these aspects can provide a clearer picture of Hydrodog's financial stability and risk profile.