During the Deer Solution franchise relationship, what activities are considered 'Prohibited Activities'?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or customers from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a Deer Solution Business; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and, collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, would constitute unfair competition and, would cause harm to Franchisor, the System, and other Deer Solution Business franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to the 2025 Deer Solution Franchise Disclosure Document, there are several activities that a franchisee is prohibited from engaging in during the term of the agreement. These 'Prohibited Activities' are designed to prevent unfair competition and protect the interests of Deer Solution, its affiliates, and other franchisees within the system. These restrictions apply not only to the franchisee but also to their owners and spouses, who are required to sign a separate agreement.
Specifically, a Deer Solution franchisee is prohibited from owning or having any legal or equitable interest in a Competitive Business, with a minor exception of owning 3% or less of a publicly traded company that is a Competitive Business. They are also barred from operating, managing, funding, or performing services for a Competitive Business, whether as an employee, officer, director, manager, consultant, or in any similar capacity.
Furthermore, franchisees cannot divert or attempt to divert any business or customers from Deer Solution or its affiliates or franchisees. They are also prohibited from inducing any customer or client of Deer Solution, its affiliates, or other franchisees to another business that is not a Deer Solution Business. Lastly, franchisees are prohibited from engaging in any actions or inactions that violate specific articles related to confidentiality and non-solicitation within the agreement. Engaging in these Prohibited Activities would be considered unfair competition and could cause harm to Deer Solution and its franchise network.