Does the Deer Solution franchise agreement define 'transfer' to include involuntary transfers?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
| i. | Franchisee's obligations on termination/non-renewal | 6, 17 | You must: pay all sums that you owe to us under the Franchise Agreement and all other agreements with us; cease owning and operating the Franchised Business; cease representing yourself as a franchisee of ours; permanently cease using and/or accessing the System, the Licensed Marks, our confidential information, the operations manual, the Business Management System, the Business Management System Data, and the System Supplies; return the operations manual and all confidential information to us in the original form provided to you and document the destruction of all electronic files related to same; completely de-identify the location and/or facility associated with the Franchised Business; as requested by us, transfer to us all data, telephone listings, digital media, accounts, web listings and websites associated with the Franchised Business; and abide by the post-termination non-competition covenants and restrictions. |
|---|---|---|---|
| j. | Assignment of the contract by franchisor | 14.A. | No restriction on our right to assign. |
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–45)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the definition of 'transfer' within the franchise agreement explicitly includes both voluntary and involuntary transfers. This means that any change in ownership or control of the franchise, whether initiated by the franchisee or resulting from external circumstances, is considered a transfer under the agreement.
This definition has significant implications for prospective Deer Solution franchisees. It means that events such as death, disability, bankruptcy, or any other situation leading to an involuntary change in ownership are subject to the transfer provisions of the franchise agreement. The franchisor's approval is required for any transfer, regardless of whether it is voluntary or involuntary.
The FDD outlines specific procedures that must be followed in the event of death or disability of the franchisee, including the appointment of an operating manager and the eventual transfer of the franchise to an approved transferee within a specified timeframe. This ensures that Deer Solution maintains control over who operates its franchises, even in unforeseen circumstances. Franchisees should carefully consider these transfer provisions and understand the potential implications for their business and their families.