Does the Franchisee for Deer Solution have to guarantee that they will satisfy all payment obligations under the Ancillary Agreements?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
(2) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, all payments, fees, monetary obligations, financial obligations, interest, and charges due and owing to Franchisor from Franchisee pursuant to this Agreement, the Ancillary Agreements, and/or any other agreements between Franchisee and Franchisor, including, without limitation, Royalty Fees and Advertising Contributions with each and every payment and obligation to be accelerated and due immediately.
- (3) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, lost revenues, profits, and fees including, but not limited to Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and all other fees, revenues and/or expenses that would have been paid to Franchisor, under the terms of this Agreement and throughout the Term of this Agreement, had a breach not occurred and had Franchisor not terminated this Agreement.
In calculating and determining the foregoing Franchisee agrees that in calculating and in determining such damages that it is fair and reasonable to use Franchisee's most recent calendar year Gross Sales in calculating and determining Franchisor lost revenues and fees and by assuming that such Gross Sales would have been earned in each and every year throughout the remainder of the Term had this Agreement not been terminated.
If, however, the Franchised Business has been open and in operation for less than one calendar year, Franchisee agrees that it is fair and reasonable to use an average of Deer Solution Business Gross Sales across the System during the year in which this Agreement was terminated and to use such average Gross Sales for the purpose of calculating and determining Franchisor lost revenues and fees and, in doing so, by assuming that such Gross Sales would have been earned in each and every year throughout the remainder of the Term had this Agreement not been terminated.
Franchisee agrees that the foregoing is a form of liquidated damages, and that it is fair and reasonable.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, franchisees and their owners are held jointly and severally liable for all payments and financial obligations to Deer Solution under the Franchise Agreement, Ancillary Agreements, and any other agreements between the franchisee and Deer Solution. This includes, but is not limited to, Royalty Fees and Advertising Contributions, which are accelerated and due immediately upon breach of contract.
In the event of a breach, Deer Solution has the right to recover all payments, fees, monetary obligations, financial obligations, interest, and charges due. They can also recover lost revenues, profits, and fees, including Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and all other fees and expenses that would have been paid throughout the term of the agreement had the breach not occurred.
To calculate these damages, Deer Solution may use the franchisee's most recent calendar year Gross Sales or, if the business has been open for less than a year, an average of Deer Solution Business Gross Sales across the system. This calculation assumes that such Gross Sales would have been earned in each year throughout the remainder of the term. The franchisee agrees that this is a fair and reasonable form of liquidated damages.