What costs are included in the 'Direct Cost of Goods Sold' for a Deer Solution outlet?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Direct Cost of Goods Sold means the direct non-managerial and non-administrative cost of goods sold by an Outlet in directly providing the Approved Services and Products, comprised of the cost of materials.
Direct Cost of Goods Sold does not include Direct Labor Cost, managerial labor and expenses, administrative labor and expenses, Service Vehicle Cost, marketing expenses, insurance expenses, operating expenses, general expenses including, but not limited to interest, taxes, depreciation, amortization, and Franchise Related Expenses.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 45–52)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the Direct Cost of Goods Sold includes the direct, non-managerial, and non-administrative cost of goods sold when directly providing approved services and products. This primarily consists of the cost of materials.
Specifically, the FDD clarifies that Direct Cost of Goods Sold does not include Direct Labor Cost, managerial labor and expenses, administrative labor and expenses, Service Vehicle Cost, marketing expenses, insurance expenses, operating expenses, general expenses (such as interest, taxes, depreciation, and amortization), and Franchise Related Expenses.
For a prospective Deer Solution franchisee, understanding these inclusions and exclusions is crucial for accurately projecting expenses and profitability. By excluding labor and other overhead costs, the Direct Cost of Goods Sold focuses specifically on the cost of the physical materials used in providing Deer Solution's services. This distinction helps in evaluating the efficiency of operations and the impact of material costs on the overall financial performance of the franchise.