During the term of the Hydrodog franchise, can a franchisee have any interest in a competitive business?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
r your termination without cause, of the agreement (but not expiration). |
| Provisions | Section in | Summary |
|---|---|---|
| Franchise or Other Agreement | ||
| (p) Death or disability of franchisee | Sections 15.5 and 15.6 | Franchise or an ownership interest in you must be assigned to an approved buyer within 3 months and must be run by a trained manager during the period prior to the assignment. Assignment is subject to our right of first refusal. |
| (q) | Section 10 | No interest in a competitive business, no |
| Non-competition | controlling ownership interest in, or | |
| covenants during the | performance of services for, a competitive | |
| term of the franchise | business anywhere. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 36–38)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees are restricted from having interests in competitive businesses during the term of the franchise agreement. Specifically, franchisees cannot have any interest in, hold a controlling ownership interest in, or perform services for a competitive business anywhere. This restriction is subject to state law, meaning the enforceability and specific interpretation of this clause may vary depending on the franchisee's location.
This non-compete covenant is designed to protect Hydrodog's market position and confidential business information. By preventing franchisees from engaging with competing businesses, Hydrodog aims to maintain its competitive edge and ensure that franchisees are fully dedicated to the success of their Hydrodog franchise. This type of restriction is common in franchising to protect the brand and prevent franchisees from using the franchisor's knowledge to benefit a competitor.
In addition to the restriction during the franchise term, Hydrodog also imposes a non-compete covenant after the franchise is terminated or expires. This post-term covenant prevents franchisees from engaging in a competing business for two years within 25 miles of the Territory or within 25 miles of any Territory or any other HydroDog Business. Like the restriction during the franchise term, this post-term restriction is also subject to state law. Prospective franchisees should carefully review these non-compete clauses and understand their implications, as they could significantly impact their ability to work in the same industry after leaving the Hydrodog system.