What forms of variable consideration are included in the Deer Solution franchise agreement?

Based on the 2025 Deer Solution Franchise Disclosure Document, the franchise agreement includes royalty fees and advertising contributions as forms of variable consideration. Upon termination or expiration of the agreement, the franchisee is obligated to pay all outstanding sums and fees, including these variable components. Additionally, franchisees must pay for all other sums and fees due to the franchisor, affiliates, and/or suppliers for products and services, including system supplies.

This means that a Deer Solution franchisee's financial obligations to the franchisor are not fixed and can fluctuate based on their sales performance (affecting royalty fees) and any changes in advertising strategies or requirements. The franchisee needs to be prepared to meet these ongoing financial obligations to remain in good standing with Deer Solution.

Prospective franchisees should carefully consider how these variable costs might impact their profitability and cash flow. It is important to understand the specific formulas or methods used to calculate royalty fees and advertising contributions, as well as the potential for these costs to change over time. Furthermore, franchisees should clarify what constitutes 'System Supplies' and how the costs of these supplies might vary.