How does Deer Solution define 'Direct Gross Profit'?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) Direct Gross Profit means Gross Sales less Direct Cost of Goods Sold, Direct Labor Cost, and Service Vehicle Cost.
Direct Gross Profit is not net profit or income and, except as to Direct Cost of Goods Sold, Direct Labor Cost, and Service Vehicle Cost, does not include the deduction of all other expenses incurred by a Deer Solution Business including, but not limited to, managerial labor and expenses, administrative labor and expenses, 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, Direct Gross Profit is defined as Gross Sales less Direct Cost of Goods Sold, Direct Labor Cost, and Service Vehicle Cost. It's a key metric for understanding the profitability of the core services provided by a Deer Solution franchise.
However, the FDD is very clear that Direct Gross Profit is not the same as net profit or income. It does not account for a range of other expenses that a Deer Solution franchisee will incur. These include managerial and administrative labor, marketing, insurance, operating and general expenses, interest, taxes, depreciation, amortization, and Franchise Related Expenses such as Royalty Fees, Brand Development Fund Fees, Technology Fees, and Sales and Support Center Fees.
Prospective franchisees should carefully consider all these additional expenses when evaluating the potential profitability of a Deer Solution franchise. While Direct Gross Profit provides a snapshot of revenue minus some direct costs, it does not represent the complete financial picture. Reviewing the itemized expenses for the Company Owned Outlet can provide insight into the types and magnitude of expenses to expect.