Can Deer Solution designate itself or its affiliates as exclusive suppliers of source-restricted goods and services?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
uppliers and Supplier Criteria**
We may designate ourselves and our affiliates as exclusive suppliers of source restricted goods and services. We may designate ourselves or a third party as exclusive supplier irrespective of the existence of competing suppliers. If, in the Manuals, we do not designate a supplier for a particular item, you will purchase all such products, supplies and services from suppliers who meet our specifications and standards.
Our affiliate, APS Innovates, LLC is currently designated as an approved supplier of deer repellent and provides central purchasing and fulfillment services to franchisees. Our affiliate, Two Knights Media, Inc. was designated as an approved supplier of software, media development, marketing management, website design and SEO services until January 1, 2025 when R3volution Brands Inc. began providing these services as well as Sales and Support Center services. Our affiliate, VIP Rewards Center, LLC is currently designated as an approved supplier of rewards program services to franchisees. Except for APS Innovates, LLC, Two Knights Media, Inc., and VIP Rewards Center, LLC, currently we are not and our affiliates are not the only approved suppliers of the source restricted goods and services identified below. Except as to Kris Goodrich, Jaime Goodrich, and Benjamin Goodrich, no officer of ours currently owns an interest in any of our designated suppliers.
During the fiscal year ending December 31, 2024, our affiliate APS Innovates, LLC earned $43,481.73 in revenue from franchisee purchases. During the fiscal year ending December 31, 2024, our affiliate Two Knights Media, Inc. earned $98,983.89 in revenue from franchisee purchases. During the fiscal year ending December 31, 2024, our affiliate VIP Rewards Center, LLC earned $9,621.22 in revenue from franchisee purchases.
If you want to purchase or lease a source restricted item from a supplier that has not been previously approved or designated by us in writing, you must send us a written request for approval and submit additional information that we may request. We may charge you a supplier review and testing fee and we may request that you send us samples from the supplier for testing and documentation from the supplier for evaluation. We may also require, subject to our discretion, that we be allowed to inspect the supplier's facilities. We will notify you of our approval or disapproval within a reasonable time, not to exceed 60
days, after we receive your written request for approval and all additional information and samples that we may request. We may, in our discretion, withhold our approval. When evaluating the approval of a particular supplier, among other things, we consider: whether the supplier can demonstrate to our reasonable satisfaction the ability to meet our standards, specifications and production requirements, the suppliers quality control, whether or not we are the exclusive supplier of the particular item, whether or not our affiliate or affiliates are the exclusive supplier of the particular item, and whether or not the suppliers approval, in our sole determination, will allow us to advance the overall interests of the System. If we have previously approved a supplier, and their standards fall below our designated standards, we will revoke our approval. We will notify you in writing of us revoking our approval.
We estimate that your purchase of goods and services from suppliers according to our specifications, including your purchase of goods or services from our designated exclusive suppliers, to represent approximately 80% of your total purchases and leases in establishing the Franchised Business and approximately 40% of the on-going operating expenses of your Franchised Business.
We currently require that you purchase or lease the following source restricted goods and services from either us or our designated supplier:
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- System Supplies You must maintain an initial and ongoing inventory of System Supplies. You must purchase the System Supplies from us, our affiliates, or our designated suppliers.
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- Branded Items and Marketing Materials All materials bearing the Licensed Marks including, but not limited to, stationary, business cards, brochures, apparel, signs and displays, must meet our standards and specifications, and must be purchased from either us directly or our designated suppliers. All of your marketing materials must comply with our standards and specifications and must be approved by us before you use them. You may market your Deer Solution Business through approved digital media and social media platforms provided that you do so in accordance with our digital media and social media policies. You must purchase all branded marketing materials from either us or our designated exclusive supplier.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 24–27)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, Deer Solution has the right to designate itself or its affiliates as exclusive suppliers of source-restricted goods and services. This means that Deer Solution franchisees may be required to purchase certain goods and services, which meet Deer Solution's specifications, exclusively from Deer Solution or its designated affiliates. Deer Solution can designate itself or a third party as the exclusive supplier, regardless of whether there are competing suppliers.
Deer Solution requires franchisees to purchase or lease certain source-restricted goods and services from them or their designated supplier. These include system supplies, branded items and marketing materials, a business management system and computer equipment, credit card processing services, sales and support center services, and service vehicles. For example, franchisees must use Deer Solution's designated supplier and vendor for credit card processing. Deer Solution also functions as the exclusive supplier of Sales and Support Center Services, for which they reserve the right to deduct up to 8.5% of Gross Sales on a weekly basis for Sales and Support Center Fees.
For the fiscal year ending December 31, 2024, Deer Solution's affiliate APS Innovates, LLC earned $43,481.73 in revenue from franchisee purchases. During that same period, affiliate Two Knights Media, Inc. earned $98,983.89, and affiliate VIP Rewards Center, LLC earned $9,621.22 from franchisee purchases. Deer Solution also earned $47,361.19 in revenue for the Sales and Support Center Services. These figures illustrate the potential financial impact of these supplier designations on both the franchisee and Deer Solution.
Deer Solution estimates that purchases from approved suppliers, including exclusive suppliers, will account for approximately 80% of the initial investment to establish the franchise and about 40% of ongoing operating expenses. While there are currently no purchase or supply agreements in effect, Deer Solution may negotiate such agreements in the future. Prospective franchisees should evaluate these requirements carefully, as they significantly impact operating costs and supplier choice.