What security is required for Hydrodog's financing of the initial franchise fee?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| Parameter | Initial Franchise Fee and for additional territories |
|---|---|
| Item Financed (1) | Up to 50% of the Initial Franchise Fee |
| Source of Financing | Us |
| Down Payment | $20,000 |
| Amount Financed | Up to 50% |
| Interest Rate/Finance Charge | 8% per annum (including finance charges) |
| Period of Repayment | 60 months |
| Security Required | Personal Guarantee |
| Whether a Person Other than the Franchisee Must Personally Guarantee the Debt (2) | If the franchisee is an entity, its owners must personally guarantee the debt |
| Prepayment Penalty | None |
| Liability Upon Default | Accelerated obligation to pay the entire amount due, pay our court costs and attorney fees incurred in collecting the debt, and termination of the franchise. |
| Waiver of Defenses or Other Legal | Waiver of right to a jury trial; homestead and other exemptions; |
| Rights | waiver of presentment, demand, protest, notice of dishonor. |
| Intent to Sell (3) | There is no intent to sell, assign or factor the debt to a third party. |
| Consideration for placement of | None |
| financing (4) |
Source: Item 10 — FINANCING (FDD page 22)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if Hydrodog provides financing for up to 50% of the initial franchise fee, the security required is a personal guarantee. This means that the franchisee is personally responsible for repaying the debt. If the franchisee is a business entity, the owners of the entity must personally guarantee the debt.
The financing offered by Hydrodog includes an interest rate of 8% per annum, which includes finance charges, with a repayment period of 60 months. There is no prepayment penalty, allowing franchisees to pay off the debt early without incurring additional charges.
However, default on the financing agreement can lead to significant consequences. Hydrodog can accelerate the obligation to pay the entire amount due, and the franchisee will be liable for court costs and attorney fees incurred by Hydrodog in collecting the debt. Additionally, defaulting on the financing agreement can result in the termination of the franchise agreement. The agreement also includes a waiver of the right to a jury trial, homestead and other exemptions, and waiver of presentment, demand, protest, notice of dishonor.
Hydrodog does not intend to sell, assign, or factor the debt to a third party. Hydrodog, at its sole discretion, may provide financing to the franchisee. Hydrodog does not require that anyone other than the franchisee personally guarantee the note.