When are Post-Termination or Post-Expiration Expenses due for a Deer Solution franchise?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
| Reporting Non-Compliance | $150 per occurrence | 14 days of invoice | Payable for failure to timely submit Royalty and Activity Reports, and other reports and financial statements as required under Franchise Agreement. |
|---|---|---|---|
| Operations Non-Compliance | $450 to $1,000 per occurrence | 14 days of invoice | Payable for failure to comply with operational standards as required and specified under Franchise Agreement, plus inspection and re- inspection costs incurred by us. |
| Payment Non-Compliance | $150 per occurrence | Payable for failure to timely pay, when due, a fee or payment due to us under the Franchise Agreement, plus interest, costs, and legal fees. | |
| Non-Compliance | Actual fees, costs, and expenses | On demand | Fees, costs, and expenses incurred by us as a result of your breach or non- compliance with the terms of your Franchise Agreement. |
| Legal Fees and Expenses | Costs and expenses | As incurred | This fee includes, but is not limited to, attorneys’ fees for any failure to pay amounts when due or failure to comply in any way with the Franchise Agreement. |
| Audit | Cost of audit | On demand | For costs incurred by us for each financial audit, provided the audit determines underreporting of 2% or greater during any designated audit period. Includes fees incurred by us including audit, legal, travel and reasonable accommodations. |
| Quality Assurance Audit | Actual costs incurred by us | As invoiced | Payable if we engage a third party to perform periodic quality assurance audits, including mystery shopper programs. |
| Management Service | 20% of Gross Sales, plus expenses | As invoiced | Payable if we elect to manage the Franchised Business due to death, disability, a failure by you to have the Franchised Business managed by an authorized Managing Owner or Manager, etc. |
| Collections | Actual fees, costs, and expenses | On demand | For costs and expenses incurred by us in collecting fees due to us, and/or to enforce the terms of the Franchise Agreement or a termination of the Franchise Agreement. Includes costs and expenses of re-inspections required by quality assurance audit. |
| NSF Check Fee of Failed Electronic Fund Transfer | $50 per violation or the maximum amount allowed by law, whichever is greater | As incurred | Payable if your bank account possesses insufficient funds and/or fails to process a payment or transfer related to a fee due from you to us. |
| Indemnification | Actual cost incurred by us | As incurred | The amount payable is the amount of any claim, liability, or loss we incur from your Franchised Business. |
| Post-Termination or | Costs and expenses | As incurred | The amount payable is the amount of |
| Post-Expiration | any claim, liability, or loss we incur | ||
| Expenses | from your Franchised Business. |
Source: Item 6 — OTHER FEES (FDD pages 14–19)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, franchisees are responsible for covering costs and expenses related to claims, liabilities, or losses incurred by Deer Solution due to the franchisee's business operations after the termination or expiration of the franchise agreement. These Post-Termination or Post-Expiration Expenses are payable 'as incurred,' meaning they are due when Deer Solution incurs these costs.
This means that a former Deer Solution franchisee could face unexpected financial obligations even after their franchise has closed or the agreement has expired. The amount due is not a fixed fee but rather the actual costs and expenses Deer Solution incurs. This could include legal fees, settlement costs, or any other expenses resulting from the franchisee's prior business activities.
Franchisees should be aware that these post-termination expenses can arise from various situations, such as unresolved customer claims, legal disputes, or non-compliance issues that occurred during the franchise term but were not resolved until after termination or expiration. It is important for prospective franchisees to understand the potential scope of these expenses and to ensure they have adequate insurance coverage and legal protection to mitigate these risks.
Compared to other franchise systems, the 'as incurred' payment term for post-termination expenses is fairly standard. However, the potential financial impact can vary significantly depending on the nature of the claims or liabilities. Therefore, it is crucial for franchisees to maintain thorough records, adhere to all operational standards, and seek legal advice when necessary to minimize the risk of incurring substantial post-termination expenses.