In Michigan, can Deer Solution transfer its obligations to a Deer Solution 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.
-
- 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 specific provision addresses the transfer of obligations in Michigan. Deer Solution cannot directly or indirectly convey, assign, or otherwise transfer its obligations to fulfill contractual obligations to a franchisee unless a provision has been made for providing the required contractual services. This means that Deer Solution must ensure that any transfer of obligations includes a plan or mechanism to continue providing the services originally promised to the franchisee.
This provision protects franchisees by ensuring they receive the support and services outlined in the franchise agreement, even if Deer Solution transfers its obligations to another party. It prevents Deer Solution from avoiding its responsibilities without ensuring the franchisee's needs are met.
For a prospective franchisee, this is a crucial safeguard. It is important to confirm that this provision is included and clearly articulated in the franchise agreement. During due diligence, a potential franchisee should discuss with Deer Solution exactly how these contractual services will be maintained if Deer Solution ever decides to transfer its obligations. This could involve a detailed plan outlining the transferee's responsibilities and qualifications, as well as mechanisms for the franchisee to seek recourse if the services are not adequately provided.