In Michigan, can Deer Solution transfer its contractual obligations to a franchisee without providing the required contractual services?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
us any sums or to cure any default in the Franchise Agreement existing at the time of the proposed transfer.
- 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).
- I. A provision that permits us to directly or indirectly convey, assign or otherwise transfer our obligations to fulfill contractual obligations to you unless a provision has been made for providing the required contractual services.
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- If our most recent financial statements are unaudited and show a net worth of less than $100,000, you may request that we arrange for the escrow of initial
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, a Michigan-specific provision addresses the transfer of contractual obligations. Deer Solution is not allowed to directly or indirectly transfer its obligations to fulfill contractual obligations to the franchisee unless it makes a provision for providing the required contractual services. This means that if Deer Solution wants to assign its responsibilities to another party, it must ensure that the franchisee continues to receive the services they were originally promised under the franchise agreement.
This provision protects franchisees by ensuring they receive the support and services outlined in their franchise agreement, even if Deer Solution transfers its obligations to a third party. It prevents Deer Solution from assigning its duties without ensuring the franchisee's needs are met.
Prospective franchisees in Michigan should carefully review this provision and understand their rights in case Deer Solution decides to transfer its contractual obligations. It would be prudent to discuss with Deer Solution how they ensure the continuity of services in the event of such a transfer and to have these assurances documented.