Is Deer Solution prohibited from engaging in any activities not expressly prohibited by the franchise agreement?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
n was necessary for the operations of the Franchised Business and where such director, officer, employee and/or agent previously executed and timely delivered to Franchisor the Confidentiality Agreement in the form attached as Exhibit 2.
6.D. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND IN-TERM NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or customers from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a Deer Solution Business; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and, collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, would constitute unfair competition and, would cause harm to Franchisor, the System, and other Deer Solution Business franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
6.E. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND POST-TERMINATION NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Post-Term Restricted Period, Franchisee shall not engage in any Prohibited Activities provided, however, that the Prohibited Activities relating to Franchisee's having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within a Restricted Territory. If Franchisee is engaged in any Prohibited Activities during the Post-Term Restricted Period, Franchisee agrees that Franchisee's Post-Term Restricted Period will be extended by the period of time during which Franchisee was engaging in the Prohibited Activity and, any such extension of time will not be construed as a waiver of Franchisee's breach or otherwise impair any of Franchisor's rights or remedies relating to Franchisee's breach.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
Based on the 2025 Deer Solution Franchise Disclosure Document, franchisees are restricted from specific activities during the term of the agreement. These 'Prohibited Activities' include owning or having an interest in a competitive business (with a minor exception of owning 3% or less in a publicly traded company), operating or managing a competitive business, diverting business or customers from Deer Solution, inducing customers to other businesses that are not Deer Solution, and violating specific articles within the agreement.
Deer Solution emphasizes that engaging in these prohibited activities would be considered unfair competition and would cause harm to the franchisor, the system, and other franchisees. The agreement extends these restrictions to the franchisee's owners and spouses, requiring them to sign a Franchise Owner and Spouse Agreement and Guaranty.
For prospective franchisees, this means that during the term of their agreement, their business activities are limited to those that do not compete with Deer Solution. This non-compete clause is a standard element in franchising, designed to protect the brand and the network of franchisees. However, the breadth of these restrictions should be carefully considered to ensure they do not unduly limit the franchisee's ability to conduct other business ventures. Franchisees in North Dakota should note the addendum stating that covenants not to compete are generally considered unenforceable in the state.
Deer Solution also states that failure to comply with the terms of the agreement will cause irreparable harm to them and their Franchisor, Deer Solution Franchising LLC, and other Deer Solution franchisees for which there is no adequate remedy at law. Therefore, any violation of these covenants will entitle Deer Solution Franchising LLC to injunctive relief. They 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 of such injunction, will be the dissolution of such injunction, if warranted, upon a hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, you agree that the amount of the bond shall not exceed $1,000. None of the remedies available to Deer Solution under this Article are exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance, and recovery of monetary damages.