Is a Deer Solution franchisee permitted to divert business or customers from the Franchisor's affiliates?
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 Deer Solution's 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from diverting business or customers from the franchisor, its affiliates, or other franchisees. This restriction is part of the in-term non-competition obligations outlined in the agreement. This means that during the term of the franchise agreement, a franchisee cannot actively take or attempt to take business away from Deer Solution or its related entities.
This restriction is in place to protect the Deer Solution brand and the interests of all franchisees within the system. By preventing franchisees from diverting business, the franchisor aims to maintain a fair and competitive environment where each franchisee has the opportunity to succeed based on their own efforts within their designated territory. This also ensures that the franchisor's affiliates, which may include company-owned operations or other related businesses, are not negatively impacted by the actions of individual franchisees.
The franchise agreement specifies that engaging in such prohibited activities would be considered unfair competition and would cause harm to Deer Solution, the overall system, and other franchisees. This underscores the importance of adhering to these restrictions and the potential consequences of violating them. Furthermore, these covenants and obligations extend not only to the franchisee but also to their owners and spouses, who are required to sign a separate agreement guaranteeing their compliance.
In practical terms, a prospective Deer Solution franchisee should understand that they are not allowed to actively solicit or take customers away from the franchisor, its affiliates, or other franchisees. Doing so could result in a breach of the franchise agreement and potential legal action. This restriction is a standard practice in franchising to protect the integrity of the brand and the interests of all parties involved.