In Michigan, can Deer Solution require a franchisee to resell items that are not uniquely identified with them?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
- H. A provision that requires you to resell to us items that are not uniquely identified with us. This subdivision does not prohibit a provision that grants us a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants us the right to acquire the assets of a franchise for the market or appraised value and has failed to cure the breach in the manner provided in Item 17(g).
Michigan FDD Amendment
Amendments to the Deer Solution Franchise Disclosure Document
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS.
IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, Michigan law prohibits certain unfair provisions in franchise documents. Specifically, if the franchise agreement includes a provision that requires a franchisee to resell items to Deer Solution that are not uniquely identified with them, that provision is void and cannot be enforced against the franchisee. This protection does not prevent Deer Solution from having the first right of refusal to purchase the franchise's assets if a third party is willing to buy them. It also does not prevent Deer Solution from acquiring the franchise's assets at market or appraised value if the franchisee has failed to fix a breach of the franchise agreement as described in Item 17(g).
In practical terms, this means that Deer Solution cannot force a Michigan franchisee to resell generic or non-branded items back to the company. This protects the franchisee from being compelled to buy back inventory that Deer Solution might want to dispose of. However, Deer Solution retains the right to buy the entire franchise business or its assets under certain conditions, such as a third-party offer or a breach of contract by the franchisee.
This provision is designed to protect franchisees from potentially unfair or exploitative practices by franchisors. By voiding such clauses, Michigan law aims to create a more balanced relationship between Deer Solution and its franchisees, ensuring that franchisees are not unduly burdened with obligations to resell non-unique items. Prospective franchisees in Michigan should carefully review the franchise agreement to ensure compliance with these state-specific protections.