How is the Management Service fee calculated for a Deer Solution franchise?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
| Reporting Non-Compliance | $150 per occurrence | 14 days of invoice | Payable for failure to timely submit Royalty and Activity Reports, and other reports and financial statements as required under Franchise Agreement. |
|---|---|---|---|
| Operations Non-Compliance | $450 to $1,000 per occurrence | 14 days of invoice | Payable for failure to comply with operational standards as required and specified under Franchise Agreement, plus inspection and re- inspection costs incurred by us. |
| Payment Non-Compliance | $150 per occurrence | Payable for failure to timely pay, when due, a fee or payment due to us under the Franchise Agreement, plus interest, costs, and legal fees. | |
| Non-Compliance | Actual fees, costs, and expenses | On demand | Fees, costs, and expenses incurred by us as a result of your breach or non- compliance with the terms of your Franchise Agreement. |
| Legal Fees and Expenses | Costs and expenses | As incurred | This fee includes, but is not limited to, attorneys’ fees for any failure to pay amounts when due or failure to comply in any way with the Franchise Agreement. |
| Audit | Cost of audit | On demand | For costs incurred by us for each financial audit, provided the audit determines underreporting of 2% or greater during any designated audit period. Includes fees incurred by us including audit, legal, travel and reasonable accommodations. |
| Quality Assurance Audit | Actual costs incurred by us | As invoiced | Payable if we engage a third party to perform periodic quality assurance audits, including mystery shopper programs. |
| Management Service | 20% of Gross Sales, plus expenses | As invoiced | Payable if we elect to manage the Franchised Business due to death, disability, a failure by you to have the Franchised Business managed by an authorized Managing Owner or Manager, etc. |
Source: Item 6 — OTHER FEES (FDD pages 14–19)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, a Management Service fee is applicable under specific circumstances. This fee is calculated as 20% of Gross Sales, in addition to any expenses incurred. This fee is charged if Deer Solution elects to manage the franchised business due to events such as the franchisee's death, disability, or failure to have the business managed by an authorized Managing Owner or Manager. The fee is payable as invoiced.
For a prospective Deer Solution franchisee, this means that in the event they are unable to manage their business due to unforeseen circumstances, Deer Solution can step in to manage the business. However, this service comes at a cost of 20% of the business's gross sales, plus any additional expenses Deer Solution incurs while managing the business.
It is important for a potential franchisee to understand the conditions under which this fee would be applied and to factor this potential cost into their financial planning. While it provides a safety net in case of emergencies, the fee significantly impacts the profitability of the franchise during the period Deer Solution manages the business. Franchisees should clarify what specific expenses could be charged in addition to the 20% of gross sales to fully understand the potential financial burden.