After termination or expiration of a Hydrodog franchise, on what date does the 25-mile restriction begin if compliance with restrictions occurs later than the termination date?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
If any person restricted by this Section refuses voluntarily to comply with the foregoing obligations, the two (2) year period will commence with the entry of an order of an arbitrator, or court if necessary, enforcing this provision. You and your owners expressly acknowledge that you possess skills and abilities of a general nature and have other opportunities for exploiting such skills. Consequently, enforcement of the covenants made in this Section will not deprive you of your personal goodwill or ability to earn a living.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the two-year restriction period begins on the date compliance with the restrictions is achieved. Specifically, if a franchisee does not voluntarily comply with the obligations after termination or expiration, the two-year period commences when an arbitrator or court order enforces the provision. This means the 25-mile restriction, preventing the franchisee from operating a competitive business within that radius, does not start until the franchisee adheres to the termination obligations, either voluntarily or through legal enforcement.
This clause protects Hydrodog by ensuring that franchisees cannot immediately compete against the brand after leaving the system. The delay in the start of the restriction period until compliance is achieved is a notable point. It incentivizes franchisees to comply promptly with their post-termination obligations to avoid a prolonged period where they are barred from competing.
For a prospective Hydrodog franchisee, this highlights the importance of understanding and adhering to the post-termination obligations outlined in the franchise agreement. Failure to comply can result in legal action and a delayed start to the period during which they are restricted from engaging in competitive business activities. This could significantly impact their ability to start a new venture in the same industry after their Hydrodog franchise ends.