What fees are included in 'Franchise Related Expenses' for a Deer Solution franchise?

According to Deer Solution's 2025 Franchise Disclosure Document, 'Franchise Related Expenses' include specific fees required under the Franchise Agreements. These fees are Royalty Fees, Brand Development Fund Fees, Technology Fees, Sales and Support Center Fees, and local marketing expenditures.

It is important to note that 'Franchise Related Expenses' do not encompass all fee and payment obligations required under the Deer Solution Franchise Agreement. This means that franchisees should carefully review the entire agreement to understand all financial obligations beyond those specifically listed as 'Franchise Related Expenses'.

For example, the financial performance representation in Item 19 of the FDD includes a deduction for 'Adjustments for Franchise Related Expenses' when analyzing the Company Owned Outlet's performance. This adjustment includes the Royalty Fee (8% of Gross Sales, amounting to $229,786 for the Company Owned Outlet), the Brand Development Fund Fee (2% of Gross Sales, amounting to $57,446), a Technology Fee (currently N/A), the Sales and Support Center Fee (6.5% of Gross Sales, amounting to $186,701), and Local Marketing (N/A). A footnote indicates that franchisees must spend not less than $10,000 per Territory per year on local marketing.

Prospective franchisees should pay close attention to these fees and understand how they are calculated, as well as any potential changes to these fees, such as the Brand Development Fund Fee potentially increasing to 3% of Gross Sales or the Sales and Support Center Fee potentially increasing to 8.5% of Gross Sales. Additionally, while a Technology Fee is currently not charged, Deer Solution reserves the right to implement one in the future, which would further impact a franchisee's expenses.