What happens if the Deer Solution Franchisor does not institute the Brand Development Fund?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
At all times and from time to time, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, Franchisor may institute, implement, maintain, delegate, and administer a brand development fund (the "Brand Development Fund"). The following shall apply to the Brand Development Fund at all times throughout the Term:
- (1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) and, in accordance with the payment terms of Article 5.E. of this Agreement (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than 3% of the Gross Sales of the Franchised Business for each weekly Accounting Period;
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the franchisor has the discretion to institute, implement, maintain, delegate, and administer a brand development fund. This fund, if established, is used for various marketing and brand-building activities. However, Deer Solution is not obligated to create or maintain this fund.
If Deer Solution chooses not to institute the Brand Development Fund, franchisees would not be required to pay the Brand Development Fund Fee, which is a percentage of Gross Sales, up to a maximum of 3% of Gross Sales for each weekly Accounting Period. Without this fund, there would be no centralized, system-wide advertising, marketing, or public relations programs financed by franchisee contributions.
While franchisees might avoid the mandatory fee, the absence of a Brand Development Fund could impact the overall brand recognition and marketing efforts for the Deer Solution system. Franchisees would need to rely more on their own local marketing initiatives. This could lead to inconsistencies in branding and marketing effectiveness across different territories. Prospective franchisees should consider the implications of operating within a system that may or may not have a centralized marketing fund and inquire about the franchisor's long-term plans for brand development.