Besides the Franchise Agreement, can defaults under Ancillary Agreements trigger the remedies described for Deer Solution?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
(2) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, all payments, fees, monetary obligations, financial obligations, interest, and charges due and owing to Franchisor from Franchisee pursuant to this Agreement, the Ancillary Agreements, and/or any other agreements between Franchisee and Franchisor, including, without limitation, Royalty Fees and Advertising Contributions with each and every payment and obligation to be accelerated and due immediately.
- (3) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, lost revenues, profits, and fees including, but not limited to Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and all other fees, revenues and/or expenses that would have been paid to Franchisor, under
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, defaults under Ancillary Agreements can trigger remedies. The FDD defines "Ancillary Agreements" as agreements between Deer Solution and the franchisee, the franchisee's owners, or the spouses of the franchisee's owners, excluding the Franchise Agreement itself. These agreements include the Franchise Owner and Spouse Agreement and Guaranty, Lease Agreement Rider, Collateral Assignment of Lease, and the Assignment of Telephone Numbers and Digital Media Accounts.
Specifically, if a franchisee defaults, Deer Solution has the right to hold the franchisee and their owners liable for all payments, fees, monetary obligations, financial obligations, interest, and charges due to Deer Solution. This liability extends not only to obligations under the Franchise Agreement but also to those under the Ancillary Agreements. This means that if a franchisee fails to meet their obligations under any of these related agreements, Deer Solution can pursue the same remedies as if the franchisee had defaulted on the Franchise Agreement itself.
This provision has significant implications for prospective franchisees. It means that franchisees and their owners must carefully review and understand all Ancillary Agreements, as a default in any of them can lead to serious financial consequences. The franchisor can accelerate all payments and obligations, making them immediately due. This could put a significant strain on the franchisee's finances and potentially lead to the termination of the franchise. Franchisees should seek legal counsel to fully understand their obligations under all agreements and the potential consequences of default.