What constitutes a material breach of the Deer Solution franchise agreement by the franchisee regarding termination?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
(f) Franchisee and/or Franchisee's Owners intentionally misrepresent and/or omit material information in any submitted application and during the application process;
(g) As to information, records, statements, and/or data that Franchisee must maintain and/or report to Franchisor pursuant to the terms of this Agreement, the Operations Manual, or as otherwise requested by Franchisor from time to time, the information, records, statements, and/or data maintained by Franchisee and/or reported by Franchisee contains intentional inaccuracies and/or material inaccuracies that are either misleading or false;
(h) Franchisee attempts to Transfer, or purportedly attempts to Transfer, this Agreement or any of Franchisee's rights under this Agreement, without Franchisor's prior approval, written consent, and/or otherwise not in accordance with this Agreement;
(i) If Franchisee is a Corporate Entity, an Owner of Franchisee attempts to Transfer or, purportedly Transfers, the Owners equity interests, ownership interests, and/or rights in Franchisee without Franchisor's prior approval, written consent, and/or otherwise not in accordance with this Agreement;
(j) Franchisee discloses, divulges, provides access to, communicates, and/or permits the communication of the contents, data and/or information contained in the Operations Manual to any third party not otherwise authorized by Franchisor;
(k) Franchisee discloses, divulges, provides access to, communicates, and/or permits the communication of Confidential Information to any third party not otherwise authorized by Franchisor;
(l) Franchisee engages in any activity that injures, harms, damages, or otherwise has a material adverse effect on Franchisor, the System, the Licensed Marks, Deer Solution Businesses, the Franchised Business, and/or the reputation of the Deer Solution brand;
(m) Franchisee, an Owner, and/or a Spouse, as applicable and whether individually or jointly, breaches or is in default of an Ancillary Agreement, and, if the applicable agreement provides for the opportunity to cure, fails to timely cure the breach or default of the Ancillary Agreement, including, without limitation, the Franchise Owner and Spouse Agreement and Guaranty;
(n) Franchisee and/or an Owner of Franchisee is convicted of a felony crime, and/or pleads guilty or nolo contendere to a felony crime;
(o) Franchisee and/or an Owner of Franchisee engages in intentionally dishonest and/or unethical conduct that, in Franchisor's Reasonable Business Judgment, results in embarrassment to Franchisor, the System, the Licensed Marks, Deer Solution Businesses, the Franchised Business, and/or the reputation of the Deer Solution brand;
(p) Franchisee fails to complete, to Franchisor's reasonable satisfaction, the Training Program and/or supplemental training programs designated by Franchisor;
(q) Franchisee fails, upon receiving actual or constructive notice, shall: (1) immediately notify Franchisor of any known breach of the Confidentiality Agreement by any person or entity; (2) immediately notify Franchisor of facts and information that would cause a reasonable person to believe that a person or entity violated the Confidentiality Agreement and/or is in the process of violating the Confidentiality Agreement; and (3) take reasonable steps including ,notice to Franchisor and Franchisee's consultation with Franchisee's legal counsel, to prevent any person or entity from violating the terms of the Confidentiality Agreement and/or otherwise publicly disseminating Confidential Information;
(r) Franchisee misappropriates, misuses, or makes any unauthorized use of the Licensed Marks, the Confidential Information, and/or the System and/or Franchisee materially impairs the goodwill associated with the Licensed Marks, and/or Franchisee applies for registration of the Licensed Marks anywhere in the world; and/or
(s) Franchisee and/or an Owner fails to comply with Anti-Terrorism Laws or becomes listed on the Annex to Executive Order 13244.
(3) Defaults and Automatic Termination After 10 Day Cure Period Franchisee shall be in default of this Agreement and, this Agreement shall be terminated, upon the occurrence of any one or more of the following actions, inactions, omissions, events, and/or circumstances, unless, Franchisee timely cures, to the satisfaction of Franchisor, such default / action, inaction, omission, event, and/or circumstance within 10 calendar days of Franchisor's written notice:
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, several actions or omissions by a franchisee can lead to a default of the franchise agreement and potential termination. These include intentional misrepresentation or omission of material information during the application process, maintaining or reporting intentionally or materially inaccurate information, records, statements, or data to Deer Solution, attempting to transfer the agreement without prior approval, or if the franchisee is a corporate entity, attempting to transfer ownership interests without approval.
Other breaches include disclosing the contents of the Operations Manual or Confidential Information to unauthorized third parties, engaging in activities that harm Deer Solution's brand or reputation, or breaching any ancillary agreements such as the Franchise Owner and Spouse Agreement and Guaranty. Additionally, a franchisee or owner being convicted of a felony, engaging in dishonest or unethical conduct that embarrasses Deer Solution, failing to complete required training programs, failing to notify Deer Solution of breaches of the Confidentiality Agreement, misappropriating or misusing the Licensed Marks, Confidential Information, or the System, or failing to comply with Anti-Terrorism Laws can also result in termination.
In the event of a default, Deer Solution typically provides a 10-day cure period, during which the franchisee must rectify the issue to Deer Solution's satisfaction to avoid termination. If termination occurs, Deer Solution has the right to void the agreement, market the franchise rights to another party without compensating the franchisee, and hold the franchisee liable for all outstanding payments and future lost revenues.
The FDD specifies that lost revenues will be calculated based on the franchisee's most recent calendar year gross sales or, if the business has been open for less than a year, on the average gross sales of Deer Solution businesses across the system. This calculation assumes that these sales levels would have continued throughout the remainder of the franchise term, and the franchisee agrees that this is a fair and reasonable form of liquidated damages.