For a Deer Solution franchisee transfer to be approved, can the franchisee be in default of their obligations under the Franchise Agreement?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
| i. | Franchisee's obligations on termination/non-renewal | 6, 17 | You must: pay all sums that you owe to us under the Franchise Agreement and all other agreements with us; cease owning and operating the Franchised Business; cease representing yourself as a franchisee of ours; permanently cease using and/or accessing the System, the Licensed Marks, our confidential information, the operations manual, the Business Management System, the Business Management System Data, and the System Supplies; return the operations manual and all confidential information to us in the original form provided to you and document the destruction of all electronic files related to same; completely de-identify the location and/or facility associated with the Franchised Business; as requested by us, transfer to us all data, telephone listings, digital media, accounts, web listings and websites associated with the Franchised Business; and abide by the post-termination non-competition covenants and restrictions. |
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| j. | Assignment of the contract by franchisor | 14.A. | No restriction on our right to assign. |
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
| l. | Franchisor's approval of transfer by franchisee | 14.B. | Transfers require our prior written consent, which may be granted or withheld in our discretion. We will not unreasonably withhold our consent of approval of franchisee's transfer. |
| m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under the Franchise Agreement and all other agreements with us; the transferee must agree to be bound by all of the terms and provisions of the Franchise Agreement; the transferee's owners and their spouses must personally guarantee all of the terms and provisions of the Franchise Agreement; you and your Owners and their spouses must sign a general release in favor of us; the transfer must provide for the assignment and/or ownership of the approved location for the Franchised Business, and the transferees continued |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–45)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, a franchisee cannot be in default of their obligations under the Franchise Agreement for a transfer to be approved. The FDD states that both the franchisee and their owners must not have defaulted in their obligations under the Franchise Agreement and all other agreements with Deer Solution. Furthermore, they must be in compliance with all obligations under these agreements.
This condition means that if a Deer Solution franchisee has failed to meet any of their contractual obligations to Deer Solution, such as payment obligations, adherence to operational standards, or compliance with legal requirements, the transfer of the franchise may be denied. This requirement protects Deer Solution by ensuring that the new franchisee is not inheriting a business already in poor standing due to the previous owner's actions or inactions.
For a prospective Deer Solution franchisee, this underscores the importance of maintaining good standing with the franchisor. Before considering a sale or transfer, franchisees should ensure they are fully compliant with all aspects of their Franchise Agreement to avoid any impediments to the transfer process. Failure to do so could result in a denial of the transfer, potentially complicating the sale of the business.