Any success Watford achieve in this way is going to be hollow. Over time, the loop hole will be closed. anything achieved during it will just be dismissed for what it is. Sometimes, even in football, the spirit of the game still counts for something. It must just be something in the water round there that makes them think franchise's are acceptable in football.
Your owners are playing Monopoly with football teams and then freely loaning players from one team they own to another, that's the loophole.