Under the Hydrodog Franchise Agreement, what entity must the Guaranty be signed by?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are an entity, you are required to complete and update, as necessary, the statement of ownership attached hereto as Attachment B throughout the term of this Agreement, and to provide us with a copy of any such updates within thirty (30) days of making them. Your HydroDog Business shall be managed by you, or if you are an entity, by one of your shareholders, partners, or members who is a natural person, holding at least a ten percent (10%) interest in the franchisee entity, and who is designated in writing to us as the person to make all decisions for the franchisee entity and to be principally responsible for communicating with us about your HydroDog Business ("Designated Owner"). Under certain circumstances we may allow you to appoint a designated manager ("General Manager") to run the day-to-day operations of your Franchised Business; the General Manager need not have an ownership interest in the franchisee entity. In addition, if you are an entity, all persons who own twenty percent (20%) or more of the beneficial ownership interests in the entity and each such person's respective spouse shall personally and unconditionally guaranty franchise owner's performance under this Agreement by signing the Owners Agreement attached hereto as Attachment D. The Designated Owner shall have the authority to speak for and bind the franchise owner in all matters pertaining to this Agreement, and all matters relating to your HydroDog Business.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if the franchisee is a business entity, all persons who own twenty percent (20%) or more of the beneficial ownership interests in the entity and each such person's respective spouse must personally and unconditionally guarantee the franchise owner's performance under the Franchise Agreement by signing the Owner's Agreement. This agreement is attached to the FDD as Attachment D.
This requirement ensures that Hydrodog can seek recourse from the personal assets of the owners should the business entity fail to meet its obligations under the Franchise Agreement. It is a common practice in franchising to have owners of business entities personally guarantee the obligations of the franchise, especially those with significant ownership.
Prospective Hydrodog franchisees should carefully review the Owner's Guaranty to understand the full extent of their personal liability. They should also consider the implications for their personal assets and financial planning. It is advisable to seek legal counsel to fully understand the ramifications of signing such a guarantee.