Generally, a mutt is of uncertain ancestry. A designer dog has documented purebred ancestry, and one knows for sure what it is.

We believe in Hybrid Vigor or Heterosis, which is an increase in the performance of hybrids over that of purebreds, most noticeably in traits like fertility and sterility, however we drive for the Euro genetics, (such as the imperil shih-tzu and Mediterranean bichon).

Heterosis is a term used in genetics and selective breeding. The term heterosis, also known as hybrid vigor or outbreeding enhancement, describes the increased strength of different characteristics in hybrids; the possibility to obtain a genetically superior individual by combining the virtues of its parents.

A mixed-breed dog Heterosis is the opposite of inbreeding depression, which occurs with increasing homozygosity. The term often causes controversy, particularly in terms of the selective breeding of domestic animals, because it is sometimes believed that all crossbred animals are genetically superior to their parents; this is true only in certain circumstances : when a hybrid is seen to be superior to its parents, this is known as hybrid vigor. When the opposite happens, and a hybrid inherits traits from their parents that makes them unfit for survival, the result is referred to as outbreeding depression.

The dominance hypothesis attributes the superiority of hybrids to the suppression of undesirable recessive genes from one parent by dominant genes from the other. It attributes the poor performance of inbred strains to loss of genetic diversity, with the strains becoming purely homozygous at many loci.
Certain combinations of genes that can be obtained by crossing two strains are advantageous in the hybrid vigor.

So what's up with these hybrid, "designer" dogs? Are they healthier?

Hybrid dogs can still have genetic problems because you are still crossing two first generation dogs, however the percentage of hybrid dogs with genetic problems is much lower than purebred dogs Because the gene pool is mixed. Breeders who breed purebred to purebred creating a first generation hybrid believe in the heterosis effect and hybrid vigor. Ours are F3 so third generation each generation thins bad recessive genes.