What articles in the Deer Solution agreement relate to territorial development and sales quotas?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 12: TERRITORY]
We and our affiliates reserve to ourselves the exclusive right on any and all terms and conditions that we deem advisable and, without any compensation or consideration to you (Franchise Agreement, Article 2.D.), to engage in the following activities (our "Reserved Rights"): (a) operate and grant to others the right to develop and operate Deer Solution Businesses using the System and Licensed Marks outside your Operating Territory, as we deem appropriate and irrespective of the proximity to your Operating Territory; (b) acquire, merge with or otherwise affiliate with one or more businesses of any kind, including businesses that offer and sell products and services that are the same as, or similar to, your Deer Solution Business, and after such acquisition, merger or affiliation to own and operate and to franchise, or license others to own and operate and to continue to own and operate such businesses of any kind, even if such businesses offer and sell products and services that are the same as or similar to a the Franchised Business (but not utilizing the Licensed Marks) within your Operating Territory; (c) be acquired by or merge with or otherwise affiliate with one or more businesses of any kind, including businesses that offer and sell products and services that are the same as or similar to the Franchised Business, even if such business or businesses presently or, in the future, own and operate and franchise or license others to own and operate businesses that offer and sell products and services that are the same as or similar to your Deer Solution Business (but not utilizing the Licensed Marks) within your Operating Territory; (d) use the Licensed Marks and System to distribute the Approved Services and Products offered and sold by the Franchised Business or products and services similar to the Approved Services and Products offered and sold by the Franchised Business in alternative channels of distribution including the internet, catalog sales, telemarketing, or other direct marketing sales (referred to as "Alternative Channels of Distribution") within or outside your Operating Territory; (e) use the Licensed Marks and System to distribute the Approved Services and Products offered and sold by the Franchised Business or services and products similar to the Approved Services and Products offered and sold by the Franchised Business in captive market sites including, but not limited to, nontraditional locations such as malls, transportation centers and limited access venues, within or outside your Operating Territory (referred to as "Closed Markets"); (f) use the Licensed Marks and System to offer, sell, and provide the Approved Services and Products offered and sold by the Franchised Business or products and services similar to the Approved Services and Products offered and sold by the Franchised Business on behalf of customers of local, regional, and/or national corporate accounts (referred to as "Corporate Accounts") within or outside your Operating Territory; and (g) use the Licensed Marks and System and to license others to use the Licensed Marks and System, to engage in all other activities not expressly prohibited by the Franchise Agreement.
[Item 23: RECEIPTS]
- (1) During the Term of this Agreement and subject to the rights of Franchisor including, but not limited to, the Reserved Rights, Franchisor grants to Franchisee and Franchisee accepts, the nonexclusive license, right and obligation to develop and operate a Deer Solution Business within the operating territory designated and set forth in Schedule 1 of this Agreement (the "Operating Territory"). If Schedule 1 does not specifically identify and designate an Operating Territory, and/or if Schedule 1 is not signed by Franchisor, the Operating Territory shall be determined by Franchisor in Franchisor's Reasonable Business Judgment;
3.J. SERVICE VEHICLES
Franchisee shall purchase and/or lease, and exclusively use in the operations of the Franchised Business, only those Service Vehicles that meet Franchisor's brand standards and specifications and, that are approved by Franchisor. At all times, Franchisee shall maintain the Service Vehicles in a clean, safe, and well-maintained condition and shall operate same in accordance with all applicable laws, rules, and regulations. Franchisee may only offer and provide the Approved Services and Products using Service Vehicles approved by Franchisor and that meet Franchisor's brand standards and specifications.
[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING]
Digital Media and Website All digital media and marketing must be approved by us.
We will designate for your Operating Territory information about your Deer Solution Business on the www.deersolution.com webpage or such other websites as we may designate for the System. (Franchise Agreement, Article 9);
Brand Development Fund We may control and administer a brand development fund (the "Brand Development Fund") (Franchise Agreement, Article 9.A.).
As disclosed in Item 6 of this Disclosure Document, you must contribute a weekly sum not to exceed 3% of weekly Gross Sales to the Brand Development Fund.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD page 28)
What This Means (2025 FDD)
Based on the 2025 Deer Solution Franchise Disclosure Document, Article 2.D, Article 3.J, and Article 9.F of the franchise agreement relate to territorial development. Article 2.A outlines the nonexclusive license granted to the franchisee to operate within the designated operating territory as defined in Schedule 1 of the agreement. The franchisor retains specific 'Reserved Rights' as detailed in Article 2.D, allowing them to operate and grant franchises outside the franchisee's territory without compensation to the franchisee.
Article 3.J pertains to the franchisee's obligation to operate exclusively within their assigned Operating Territory and restricts direct solicitation of customers outside of it. However, with written approval from Deer Solution, franchisees may provide services in 'Open Areas' under certain conditions. This article also stipulates that franchisees must use only approved service vehicles that meet Deer Solution's standards.
The FDD mentions that digital media and marketing related to the Deer Solution business must be approved by the franchisor, as stated in Article 9. This indicates that Deer Solution maintains control over the brand's image and marketing strategies, ensuring consistency across all franchise locations. The franchisee is required to adhere to these guidelines in their promotional activities. The agreement also states that the franchisee must contribute up to 3% of weekly gross sales to the Brand Development Fund, which Deer Solution uses for marketing, research, and development efforts.