Does the Franchisee for Deer Solution have to guarantee that they will satisfy all payment obligations under the Franchise Agreement?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, you have received and have thoroughly reviewed the completed Franchise Agreement, including Schedules and Exhibits attached to the Franchise Agreement;
WHEREAS, we have recommended that you thoroughly review the Franchise Agreement, this Agreement and all exhibits and schedules to the Franchise Agreement with a lawyer selected and hired by you;
WHEREAS, you represent to us that you are either: (a) an Owner of Franchisee such that you own or control a legal, equitable or beneficial ownership or equity interest in Franchisee and/or otherwise meet the definition of an "Owner" as set forth in this Agreement; and/or (b) the "Spouse" of an Owner of Franchisee;
WHEREAS, you acknowledge that this Agreement will apply to you individually, jointly, and severally with all others who sign this Agreement (including if this Agreement is signed in counterparts or electronically among other Owners and Spouses);
WHEREAS, you acknowledge that this Agreement, among other things, personally obligates you to guarantee Franchisee's obligations to us and obligates you to brand protection, confidentiality and noncompetition restrictions and covenants and that you enter into this Agreement to induce us to enter into the Franchise Agreement with Franchisee; and
WHEREAS, you acknowledge that we are relying on this Agreement and that without this Agreement we would not have entered into and/or would not be simultaneously entering into the Franchise Agreement with Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the franchisee, along with their spouse and owners, may be required to sign a separate agreement that personally guarantees the franchisee's obligations to Deer Solution. This agreement applies individually, jointly, and severally to all signatories. Deer Solution states that it relies on this guarantee to enter into the Franchise Agreement with the franchisee.
This means that if the franchisee fails to meet their financial obligations, Deer Solution can pursue the franchisee's owners and spouses personally to recover the owed amounts. This is a significant commitment and potential risk for the franchisee and their family, as their personal assets could be at stake. The agreement also includes obligations related to brand protection, confidentiality, and non-competition, further extending the personal responsibilities of the signatories.
Franchise agreements often include clauses requiring personal guarantees, especially for new or smaller franchise systems. This practice helps protect the franchisor's financial interests by ensuring there are additional parties responsible for fulfilling the financial obligations of the franchise. Prospective Deer Solution franchisees should carefully review this agreement with their legal and financial advisors to fully understand the implications of providing a personal guarantee.