Does the Franchisee for Deer Solution have to personally guarantee payment of all advertising obligations under Article 9 of the Franchise Agreement?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not, on grounds of the alleged nonperformance, material breach, or default by Franchisor of this Agreement, any other agreement between Franchisor and Franchisee, or for any other reason, withhold any payment, fee, or any other amount payable by Franchisee to Franchisor pursuant to this Agreement, including, without limitation, the payment of the Royalty Fee and Advertising Contributions, or any other payment obligation by Franchisee to Franchisor. Franchisee shall not have the right to offset or withhold any liquidated or unliquidated amount allegedly due to Franchisee from Franchisor against any payment, fee, or any other amount payable to Franchisor pursuant to this Agreement or any other payment obligation by Franchisee to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
Based on the 2025 Deer Solution Franchise Disclosure Document, there is no explicit mention of a personal guarantee required from the franchisee for advertising obligations under Article 9 of the Franchise Agreement. However, the document does state that the franchisee is obligated to make advertising contributions as outlined in Article 9.B. and cannot withhold these payments due to alleged non-performance or breach by Deer Solution.
Article 9.G discusses Advertising Cooperatives, stating that if an Advertising Cooperative exists in the franchisee's area, the franchisee must participate and contribute as required, but these contributions count toward the franchisee's minimum local marketing obligations set forth in Article 9.B. The franchisee is obligated to contribute to the Brand Development Fund as per Article 9, and failure of other franchisees to contribute does not release the franchisee from their obligations.
While the FDD excerpts do not explicitly require a personal guarantee for advertising obligations, it is important for a prospective franchisee to clarify this point with Deer Solution. They should inquire whether a separate personal guarantee document is required concerning advertising fees or other financial obligations under the franchise agreement. Understanding the full extent of financial liabilities and guarantees is crucial before entering into a franchise agreement.