What financial obligations must remain the same in a new Deer Solution Franchise Agreement upon transfer?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
Transfers which in the aggregate Transfers substantially all of the assets of the Franchised Business or a controlling interest in Franchisee, then, at the election of Franchisor and upon notice from Franchisor to Franchisee, the transferee may be required to execute (and/or, upon Franchisor's request, shall cause all interested parties to execute) for a term ending on the expiration date of the original Term of this Agreement, the then current standard form Franchise Agreement offered to new franchisees of Deer Solution Businesses and any other agreements as Franchisor requires. Such agreements shall supersede this Agreement and its associated agreement in all respects, and the terms of Franchisor's then current agreements may differ from the terms in this Agreement, provided that such agreements shall provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, if a franchisee transfers substantially all assets or a controlling interest in their franchise, Deer Solution has the option to require the transferee to execute the then-current standard Franchise Agreement. This new agreement would run for the remainder of the original term.
While the terms of the new agreement may differ from the original, Deer Solution specifies that the Royalty Fee, Advertising Contributions, and all other financial or monetary obligations must remain the same as those established in the original agreement. This provision ensures that the core financial obligations of the franchise remain consistent upon transfer, providing some financial predictability for the transferee.
However, it's important to note that the transferee will likely face additional costs. The transferee is responsible for upgrading the Administrative Office to meet Deer Solution's current standards. The transferee must also cover the costs for themselves and their employees to complete any required training programs. Additionally, the franchisee (transferor) is responsible for paying a Transfer Fee to Deer Solution. Therefore, while the fundamental financial obligations remain consistent, a transferee should anticipate significant expenses related to the transfer process itself.