Is there a geographic limit to the restriction on a Hydrodog franchisee's interest in a competitive business?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, other than your HydroDog Business;
- (b) have any direct or indirect controlling interest as a disclosed or beneficial owner in a Competitive Business, wherever located;
- (c) have any direct or indirect interest (e.g. through a spouse or child) as a disclosed or beneficial owner, investor, partner, director, officer, employee, consultant, member, Manager, representative or agent or in any other capacity in any Competitive Business operating (i) within the Territory; (ii) within twenty-five (25) miles of the Territory; or (iii) within twenty-five (25) miles of any other HydroDog Business's Territory in operation or under development on the later of (a) the effective date of the termination or expiration of this Agreement or (b) the date on which you cease to have any direct or indirect interest in a Competitive Business;
- (d) perform services as a director, officer, Manager, employee, consultant, representative, agent or otherwise for a Competitive Business, wherever located; or
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, there are geographic limits to the restriction on a franchisee's interest in a competitive business. Specifically, a franchisee cannot have a direct or indirect interest in a Competitive Business operating within the following areas: the franchisee's Territory; within twenty-five (25) miles of the Territory; or within twenty-five (25) miles of any other HydroDog Business's Territory in operation or under development. These restrictions apply on the later of the effective date of the termination or expiration of the Franchise Agreement or the date on which the franchisee ceases to have any direct or indirect interest in a Competitive Business.
However, the restrictions are not entirely limited geographically. A Hydrodog franchisee is prohibited from having any direct or indirect controlling interest as a disclosed or beneficial owner in a Competitive Business, wherever located. Similarly, a franchisee cannot perform services as a director, officer, Manager, employee, consultant, representative, agent or otherwise for a Competitive Business, wherever located.
These restrictions are in place to protect Hydrodog's market and confidential information. The FDD states that the use or duplication of any Confidential Information in any other business will constitute an unfair method of competition. The franchisee also agrees that the time period, geographic area, and scope of the competitive restrictions are reasonably necessary to protect Hydrodog's localized efforts and the Franchisor's efforts to develop HydroDog Businesses throughout the U.S.