Are all payments and obligations accelerated and due immediately upon termination of a Deer Solution franchise?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
(2) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, all payments, fees, monetary obligations, financial obligations, interest, and charges due and owing to Franchisor from Franchisee pursuant to this Agreement, the Ancillary Agreements, and/or any other agreements between Franchisee and Franchisor, including, without limitation, Royalty Fees and Advertising Contributions with each and every payment and obligation to be accelerated and due immediately.
(3) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, lost revenues, profits, and fees including, but not limited to Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and all other fees, revenues and/or expenses that would have been paid to Franchisor, under the terms of this Agreement and throughout the Term of this Agreement, had a breach not occurred and had Franchisor not terminated this Agreement.
In calculating and determining the foregoing Franchisee agrees that in calculating and in determining such damages that it is fair and reasonable to use Franchisee's most recent calendar year Gross Sales in calculating and determining Franchisor lost revenues and fees and by assuming that such Gross Sales would have been earned in each and every year throughout the remainder of the Term had this Agreement not been terminated.
If, however, the Franchised Business has been open and in operation for less than one calendar year, Franchisee agrees that it is fair and reasonable to use an average of Deer Solution Business Gross Sales across the System during the year in which this Agreement was terminated and to use such average Gross Sales for the purpose of calculating and determining Franchisor lost revenues and fees and, in doing so, by assuming that such Gross Sales would have been earned in each and every year throughout the remainder of the Term had this Agreement not been terminated.
Franchisee agrees that the foregoing is a form of liquidated damages, and that it is fair and reasonable.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, upon termination of the franchise agreement, all payments and obligations owed to Deer Solution by the franchisee and their owners become accelerated and are immediately due. This includes, but is not limited to, royalty fees, advertising contributions, and any other financial obligations outlined in the franchise agreement or any ancillary agreements. This means that any outstanding balances or future payments that would have been due over the remaining term of the agreement become payable at once.
In addition to the immediate payment of outstanding fees, Deer Solution franchisees and their owners are also liable for lost revenues, profits, and fees that Deer Solution would have received throughout the term of the agreement had the breach not occurred. To calculate these lost revenues, Deer Solution will use the franchisee's most recent calendar year gross sales. If the business has been open for less than a year, Deer Solution may use the average gross sales across the entire Deer Solution system during the year of termination to project lost revenues.
This calculation is considered a form of liquidated damages, which the franchisee agrees is fair and reasonable. This clause has significant financial implications for a franchisee who breaches the agreement, as they could be responsible for a substantial lump sum payment covering not only existing debts but also projected future earnings. Prospective franchisees should carefully consider this acceleration clause and understand the potential financial risks associated with early termination of the Deer Solution franchise agreement.