Can Hydrodog spend more or less than the aggregate contribution of all HydroDog Businesses in a fiscal year?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
We may spend on behalf of the Marketing Fund, in any fiscal year an amount greater or less than the aggregate contribution of all the HydroDog Businesses to the Marketing Fund in that year, and the Marketing Fund may borrow from us or others to cover deficits or invest any surplus for future use.
In addition to other Marketing Fund fees, we may assess you, and you must pay to the Marketing Fund such Marketing Fund fees as we or the Fund deems necessary to address any deficits or special needs of the Marketing Fund.
All interest earned on monies contributed to the Marketing Fund will be used to pay System Development costs before other assets of the Marketing Fund are expended.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog has the flexibility to manage the Marketing Fund in a way that allows them to spend more or less than the total contributions from all HydroDog businesses in a given fiscal year. This means that in some years, Hydrodog may spend more on marketing than what franchisees contributed, covering the deficit by borrowing or using surplus funds from previous years. Conversely, if there's a surplus, Hydrodog can invest it for future marketing activities.
This approach provides Hydrodog with financial flexibility to adjust marketing efforts based on the needs of the system. For example, if Hydrodog identifies a significant marketing opportunity, they can invest more than the current contributions allow, potentially boosting brand awareness and driving sales for all franchisees. However, it also means that franchisees' contributions in a particular year might not directly correlate with the marketing expenditure during that same period.
Furthermore, Hydrodog has the right to assess additional Marketing Fund fees from franchisees if the fund faces deficits or has special needs. This ensures that the Marketing Fund can maintain its activities even if expenditures exceed contributions. All interest earned on the Marketing Fund will be used to pay System Development costs before other assets of the Marketing Fund are expended.
While Hydrodog aims to maximize recognition of the Hydrodog marks and patronage of the HydroDog Businesses, the FDD clarifies that Hydrodog is not obligated to ensure that marketing expenditures in any geographic area are proportionate or equivalent to the contributions from HydroDog Businesses operating in that area. This means that some franchisees may benefit more or less directly from the Marketing Fund's activities than others, regardless of their contributions.