What discretion does Deer Solution have over the strategic direction of the Brand Development Fund?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisor's immediately preceding fiscal year shall be made available to Franchisee upon Franchisee's written request. Franchisor will have the right to cause the Brand Development Fund to be incorporated or operated through an entity separate from Franchisor at such time as Franchisor deems appropriate, and such successor entity shall have all rights and duties of Franchisor pursuant to this Article 9.A.(8);
- (9) Although Franchisor will endeavor to utilize the Brand Development Fund to develop advertising and marketing materials and programs, Franchisor undertakes no obligation to ensure that expenditures by the Brand Development Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the Brand Development Fund by Deer Solution Businesses operating in that geographic area or that any Deer Solution Businesses will benefit directly or in proportion to its contribution to the Brand Development Fund from the development of advertising and marketing materials. Franchisor may use the Brand Development Fund to promote or benefit any type of Deer Solution Businesses in the System. Franchisor may use the Brand Development Fund to promote or benefit Deer Solution Businesses located within a particular region of the United States. Franchisee agrees that Franchisee's failure to derive any such benefit will not serve as a basis for a reduction or elimination of its obligation to contribute to the Brand Development Fund. Franchisee agrees that the failure (whether with or without Franchisor's permission) of any other franchisee to make the appropriate amount of contributions to the Brand Development Fund shall not in any way release Franchisee from or reduce Franchisee's obligations under this Article 9, such obligations being separate and independent obligations of Franchisee under this Agreement. Except as expressly provided in this Article 9, Franchisor assumes no direct or indirect liability, responsibility, or obligation to Franchisee with respect to the maintenance, direction, and/or administration of the Brand Development Fund; and
- (10) Franchisor, in Franchisor's Reasonable Business Judgment, may establish a council to provide guidance respecting the administration of the Brand Development Fund and marketing matters concerning the Brand Development Fund. The council shall only serve in an advisory capacity and Franchisor shall select members of the council which may be comprised of employees of Franchisor, Franchisor, franchisees of the System and third parties.
9.B. LOCAL MARKETING
On an on-going annual basis, Franchisee must not spend less than $10,000 per Territory per year on local marketing of the Franchised Business within and/or targeted to Franchisee's Operating Territory (the "Minimum Annual Local Marketing Requirement"). Franchisee must spend a minimum of $10,000 per Territory per year throughout the Operating Territory, however, upon Franchisor's prior written approval, Franchisee may meet this requirement by spending less than $10,000 per year in some of the Territories provided Franchisee spends more than $10,000 per year in Franchisee's remaining Territories to meet the cumulative requirement. During the first three months following the earlier of the Scheduled Business Commencement Date or the Actual Business Commencement Date of the Franchised Business, Franchisee shall spend not less than $2,500 per Territory on the local marketing of the Franchised Business within and/or targeted to Franchisee's Operating Territory. Franchisor may require Franchisee to pay the Minimum Annual Local Marketing Requirement to Franchisor, Franchisor's affiliates, and/or Franchisor's designees to conduct the local marketing for the Franchised Business. On or before the 5th day of each month, or, such other dates as specified by Franchisor, Franchisee shall provide Franchisor with an accurate accounting of Franchisee's local marketing expenditures, placements, activities, and metrics for the immediately preceding calendar year. At the request of Franchisor, Franchisee shall provide Franchisor with on-going access to any and all data and systems that record and/or report information related to Franchisee's local marketing activities and expenditures and to provide Franchisor such other periodic reports and records as may be requested by Franchisor.
If the Franchisee's expenditures in any and all calendar year periods do not, in aggregate as to each respective calendar year period, equal or exceed the Minimum Annual Local Marketing Requirement for the respective annual period then Franchisor, in Franchisor's discretion and Reasonable Business Judgment, may require that the deficiency be added as additional local marketing expenditures, over and above the Minimum Annual Local Marketing Requirement, that Franchisee must spend within the immediately succeeding annual period as directed by Franchisor, or, at Franchisor's discretion, be contributed to a Brand Development Fund.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, Deer Solution has significant discretion over the Brand Development Fund. While Deer Solution may establish a council to provide guidance, this council is purely advisory, and Deer Solution ultimately selects its members, which may include employees, franchisees, and third parties. Deer Solution is not obligated to ensure that the fund's expenditures in any area are proportionate to the contributions from Deer Solution Businesses in that area, nor that any Deer Solution Businesses will directly benefit in proportion to their contributions. Deer Solution can use the fund to promote any type of Deer Solution Businesses or those in a specific region. Franchisees are still obligated to contribute to the fund even if they do not perceive a direct benefit.
Deer Solution can use the Brand Development Fund to cover its own costs and expenses, such as salaries, administrative costs, and overhead, as long as these are reasonably related to the fund's administration, activities, and brand awareness goals. This includes expenses for advertising, marketing, product and service testing, system maintenance, and digital media development. Deer Solution is allowed to spend more or less than the total contributions to the fund in any given fiscal year.
Deer Solution Businesses owned by Deer Solution or its affiliates are not required to pay into the Brand Development Fund. The Brand Development Fund is not treated as a trust, and Deer Solution is not considered a trustee or fiduciary of the fund. Deer Solution can deposit and maintain the fund's monies in its general accounts, without segregating them from other assets. Franchisees are required to participate in all advertising, marketing, promotions, research, and public relations programs instituted by the Brand Development Fund.