Within what distance of a Hydrodog territory is a franchisee prohibited from having an 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;
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, franchisees face restrictions on having interests in competitive businesses within specific geographic boundaries. Specifically, a franchisee cannot have a direct or indirect interest in a Competitive Business operating within their own territory, within 25 miles of their territory, or within 25 miles of any other HydroDog Business's territory that is in operation or under development. These restrictions apply from the termination or expiration date of the Franchise Agreement or from the date the franchisee ceases to have any interest in a Competitive Business, whichever is later.
The term "Competitive Business" is broadly defined as any business that offers pet grooming, pet care, pet products, or services that are similar to those offered by HydroDog, excluding other HydroDog franchises. This definition includes mobile, fixed, internet-based, or catalog-based businesses. The restrictions also extend to various roles such as owner, investor, partner, director, officer, employee, consultant, or agent in a Competitive Business.
These restrictions are designed to protect HydroDog's market and confidential information. The FDD also specifies that engaging in a competitive business that interferes with the franchisee's obligations under the agreement is prohibited, unless the HydroDog business is managed by an approved Chief Operating Officer. Passive investments in non-competing businesses are permitted, but active roles like director, officer, or majority stockholder are not. Violation of these competitive restrictions can lead to liquidated damages equivalent to the then-current initial franchise fee.