Can Deer Solution obtain a declaratory judgment that the franchise agreement is terminated after a breach?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
st or demand. You will not use the Confidential Information for any purpose other than for the performance of your duties on behalf of us and in accordance with the scope of your work with us.
- 5. Reasonableness of Covenants and Restrictions. You agree that the terms of this Agreement are reasonable and fair and that you have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Agreement. You hereby waive any right to challenge the terms of this Agreement as being overly broad, unreasonable, or otherwise unenforceable.
6. Breach. You agree that failure to comply with the terms of this Agreement will cause irreparable harm to us and to our Franchisor, Deer Solution Franchising LLC, and other Deer Solution franchisees for which there is no adequate remedy at law. Therefore, you agree that any violation of these covenants will entitle us or our Franchisor, Deer Solution Franchising LLC, to injunctive relief. You agree that we and/or our Franchisor, Deer Solution Franchising LLC, may apply for such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of yours, in the event of the entry
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
The 2025 Deer Solution Franchise Disclosure Document (FDD) addresses the remedies available to Deer Solution in the event of a franchisee breach. While the FDD does not explicitly state that Deer Solution can obtain a declaratory judgment, it does state that failure to comply with the terms of the agreement will cause irreparable harm to Deer Solution and that Deer Solution is entitled to injunctive relief. Deer Solution may apply for injunctive relief, without bond, but upon due notice. The franchisee's sole remedy, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon a hearing duly held, with all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived. If a court requires the filing of a bond, the amount of the bond shall not exceed $1,000.
In addition to injunctive relief, Deer Solution has other remedies available, including specific performance and recovery of monetary damages. These remedies are not exclusive and may be combined with others under the agreement, at law, or in equity. Deer Solution can also void and terminate the agreement and market the rights granted to the franchisee to another party without compensating the franchisee.
Furthermore, Deer Solution can hold the franchisee liable for all payments, fees, monetary obligations, and charges due, including Royalty Fees and Advertising Contributions, which will be accelerated and due immediately. They can also recover lost revenues, profits, and fees, including Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and all other fees that would have been paid throughout the term of the agreement had the breach not occurred. These damages may be calculated using the franchisee's most recent calendar year Gross Sales or, if the business has been open for less than a year, an average of Deer Solution Business Gross Sales across the system. The franchisee agrees that this calculation is a form of liquidated damages and is fair and reasonable.
Prospective franchisees should be aware of these potential consequences in the event of a breach and consult with legal counsel to fully understand their rights and obligations under the franchise agreement. The amendments to the FDD for Rhode Island, Virginia, and Washington also highlight the importance of understanding state-specific franchise laws, which may provide additional protections to franchisees.