Is there an exception for failing to pay taxes for a Hydrodog franchisee?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- (t) you fail to pay when due any federal or state income, service, sales or other taxes due on the operations of your HydroDog Business, unless you are in good faith contesting your liability for such taxes;
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, a franchisee may be in breach of their agreement if they fail to pay federal or state income, service, sales, or other taxes when due on the operations of their HydroDog Business. However, there is an exception if the franchisee is in good faith contesting their liability for such taxes.
This means that if a Hydrodog franchisee has a legitimate dispute regarding their tax obligations and is actively challenging those obligations in good faith, this specific failure to pay taxes may not be considered a breach of the franchise agreement. However, the franchisee would need to demonstrate that they are genuinely contesting the tax liability, not simply neglecting to pay.
It is important to note that this exception only applies if the franchisee is contesting the tax liability in good faith. If the franchisee is simply failing to pay taxes without a legitimate dispute, this would still be considered a breach of the franchise agreement and could lead to termination.