How is the Brand Development Fund Fee calculated for Deer Solution franchisees?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) and, in accordance with the payment terms of Article 5.E. of this Agreement (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than 3% of the Gross Sales of the Franchised Business for each weekly Accounting Period;
(2) Franchisor will provide Franchisee with written notice of the Brand Development Fund Contribution Percentage. Upon such written notice to Franchisee, the Brand Development Fund Fee be paid by Franchisee to the Brand Development Fund and/or, at Franchisor's election, prededucted from Franchisee's Gross Sales by Franchisor and shall be applicable at all times thereafter throughout the Term, except as may be otherwise designated by Franchisor in writing. The Brand Development Fund Fee shall be paid to Franchisor on the Due Date and in accordance with the payment terms and method set forth in Article 5.B. for the payment of Royalty Fees;
(3) Franchisor, in Franchisor's Reasonable Business Judgment, shall direct all advertising, media placement, marketing and public relations programs and activities financed by the Brand Development Fund, with sole discretion over the strategic direction, creative concepts, materials, and endorsements used by the Brand Development Fund, and the geographic, market, and media placement and allocation
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the Brand Development Fund Fee is a mandatory and continuing fee. This fee is calculated as a percentage of the franchisee's Gross Sales, as determined by Deer Solution. The franchisee will receive written notice of the specific percentage required for the Brand Development Fund contribution.
However, the FDD stipulates that franchisees will not be required to contribute more than 3% of their Gross Sales for each weekly accounting period. This provides a cap on the amount a franchisee must contribute, regardless of how high their gross sales may be in a given week. The Brand Development Fund Fee is due on a specific date, referred to as the 'Due Date,' and must be paid according to the payment terms outlined in Article 5.E of the Franchise Agreement.
Deer Solution has the option to pre-deduct the Brand Development Fund Fee from the franchisee's Gross Sales. This fee is paid to Deer Solution and will be applicable throughout the term of the agreement unless otherwise specified in writing by Deer Solution. The Brand Development Fund is used for advertising, media placement, marketing, and public relations programs, with Deer Solution having sole discretion over these activities.