What is the calculation for the Management Service fee for a Deer Solution franchisee?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
| Reporting Non-Compliance | $150 per occurrence | 14 days of invoice | Payable for failure to timely submit Royalty and Activity Reports, and other reports and financial statements as required under Franchise Agreement. |
|---|---|---|---|
| Operations Non-Compliance | $450 to $1,000 per occurrence | 14 days of invoice | Payable for failure to comply with operational standards as required and specified under Franchise Agreement, plus inspection and re- inspection costs incurred by us. |
| Payment Non-Compliance | $150 per occurrence | Payable for failure to timely pay, when due, a fee or payment due to us under the Franchise Agreement, plus interest, costs, and legal fees. | |
| Non-Compliance | Actual fees, costs, and expenses | On demand | Fees, costs, and expenses incurred by us as a result of your breach or non- compliance with the terms of your Franchise Agreement. |
| Legal Fees and Expenses | Costs and expenses | As incurred | This fee includes, but is not limited to, attorneys’ fees for any failure to pay amounts when due or failure to comply in any way with the Franchise Agreement. |
| Audit | Cost of audit | On demand | For costs incurred by us for each financial audit, provided the audit determines underreporting of 2% or greater during any designated audit period. Includes fees incurred by us including audit, legal, travel and reasonable accommodations. |
| Quality Assurance Audit | Actual costs incurred by us | As invoiced | Payable if we engage a third party to perform periodic quality assurance audits, including mystery shopper programs. |
| Management Service | 20% of Gross Sales, plus expenses | As invoiced | Payable if we elect to manage the Franchised Business due to death, disability, a failure by you to have the Franchised Business managed by an authorized Managing Owner or Manager, etc. |
Source: Item 6 — OTHER FEES (FDD pages 14–19)
What This Means (2025 FDD)
According to the 2025 Deer Solution Franchise Disclosure Document, the Management Service fee is calculated as 20% of Gross Sales, plus any expenses incurred. This fee is charged if Deer Solution elects to manage the franchised business under specific circumstances. These circumstances include the death or disability of the franchisee, or a failure by the franchisee to have the business managed by an authorized Managing Owner or Manager.
For a Deer Solution franchisee, this means that in the event they are unable to manage their business due to unforeseen circumstances, Deer Solution can step in to manage the business. However, the franchisee will be responsible for paying 20% of their Gross Sales, in addition to any expenses incurred by Deer Solution during the management period. The fee is payable as invoiced.
This fee structure is important for prospective franchisees to consider, as it represents a significant cost that could be incurred if Deer Solution needs to take over management of the business. It is essential to understand the conditions under which this fee would be applied and to factor it into financial planning. Franchisees should clarify what specific expenses could be charged in addition to the 20% of Gross Sales to fully understand the potential financial impact.