In the context of a Deer Solution franchise transfer, does the definition of 'transfer' include a subfranchise?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
| i. | Franchisee's obligations on termination/non-renewal | 6, 17 | You must: pay all sums that you owe to us under the Franchise Agreement and all other agreements with us; cease owning and operating the Franchised Business; cease representing yourself as a franchisee of ours; permanently cease using and/or accessing the System, the Licensed Marks, our confidential information, the operations manual, the Business Management System, the Business Management System Data, and the System Supplies; return the operations manual and all confidential information to us in the original form provided to you and document the destruction of all electronic files related to same; completely de-identify the location and/or facility associated with the Franchised Business; as requested by us, transfer to us all data, telephone listings, digital media, accounts, web listings and websites associated with the Franchised Business; and abide by the post-termination non-competition covenants and restrictions. |
|---|---|---|---|
| j. | Assignment of the contract by franchisor | 14.A. | No restriction on our right to assign. |
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–45)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the definition of 'transfer' does indeed include a subfranchise. The FDD specifies that a transfer encompasses various actions, whether voluntary or involuntary, direct or indirect. This broad definition is important for prospective franchisees to understand, as it clarifies that any attempt to subfranchise the Deer Solution business is considered a transfer under the terms of the Franchise Agreement.
This means that if a Deer Solution franchisee wishes to grant a subfranchise, they must adhere to the transfer requirements outlined in the Franchise Agreement. These requirements likely include obtaining prior written consent from Deer Solution, which can be granted or withheld at their discretion. The franchisee will also need to ensure that the subfranchisee meets certain conditions and agrees to be bound by the terms of the original Franchise Agreement.
The inclusion of subfranchising within the definition of 'transfer' gives Deer Solution control over who operates under their brand. By requiring approval for subfranchises, Deer Solution can maintain standards and protect the integrity of their brand. Prospective franchisees should carefully review the conditions for transfer in Item 17 of the FDD to fully understand their obligations and the process for obtaining approval for any transfer, including a subfranchise.