factual

Does Deer Solution have the right to void and terminate the Franchise Agreement upon a franchisee's default?

Deer_Solution Franchise · 2025 FDD

Answer from 2025 FDD Document

in the event of the termination of this Agreement as a result of a default or breach by Franchisee and/or, by Franchisee's Owners and/or affiliates of any Ancillary Agreements, Franchisor, in addition to any and all other rights and remedies available to Franchisor as set forth in this Agreement, and, at law and in equity, shall possess the following rights and remedies, each of which are not exclusive of the other and may be/are in conjunction with one another:

(1) To void and terminate this Agreement, and thereafter to market, sell, transfer, convey and assign

the rights granted to Franchisee under this Agreement to any other person or entity in Franchisor's sole discretion and without compensation to Franchisee.

  • (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.
  • (4) To hold Franchisee and Franchisee's Owners liable for all costs, fees, expenses, and/or damages incurred by Franchisor and/or suffered by Franchisor as a result of a breach or termination including, but not limited to, the recovery of reasonable attorney fees and expenses including court costs, arbitration fees, mediation fees, arbitrator fees, mediator fees, depositions, and other related expenses.
  • (5) To enjoin, restrain, and otherwise prohibit Franchisee from operating the Franchised Business or exercising any rights granted to Franchisee under this Agreement pursuant to a court order restraining order, injunction, or other means.
  • (6) Declaratory judgment that this Agreement and all rights granted to Franchisee under this Agreement are terminated, null and void.
  • (7) All other remedies and/or rights available to Franchisor as otherwise set forth in the Agreement and/or as may be otherwise available by law or equity.

In the event of a breach or default of this Agreement, should Franchisor elect, at Franchisor's sole discretion, to not terminate this Agreement, such action shall be without prejudice and without waiver of Franchisor's rights in the future. Further, at all times, and without prejudice to Franchisor's right to declare a default and, among other things, terminate this Agreement, Franchisor may: (i) temporarily or permanently suspend any existing credit arrangements or accommodations previously extended to Franchisee and/or refrain from offering or making available to Franchisee any credit arrangements or accommodations that may be offered or made available to other System franchisees; (ii) modify payment terms for approved products, supplies, or other merchandise purchased by Franchisee which may include, without limitation, requiring cash on

delivery; (iii) disqualify Franchisee from being eligible for, or from participating in, special promotion programs, rebates, and/or rebate sharing that may be offered or made available to other System franchisees; and/or (iv) refrain from providing or making available to Franchisee promotional materials or other materials developed by the Brand Development Fund and/or Advertising Cooperative.

Source: Item 23 — RECEIPTS (FDD pages 55–246)

What This Means (2025 FDD)

According to the 2025 Deer Solution Franchise Disclosure Document, Deer Solution has the right to void and terminate the Franchise Agreement if a franchisee defaults. Upon termination, Deer Solution can market, sell, transfer, convey, and assign the rights granted to the franchisee to another entity at their discretion, without compensating the franchisee. Additionally, the franchisee and their owners are liable for all outstanding payments, fees, monetary obligations, financial obligations, interest, and charges owed to Deer Solution. This includes royalty fees and advertising contributions, which are accelerated and immediately due.

Deer Solution can also recover lost revenues, profits, and fees from the franchisee and their owners, including royalty fees, brand development fund fees, advertising contributions, and other fees that would have been paid throughout the term of the agreement had the breach not occurred. To calculate these damages, Deer Solution may use the franchisee's most recent calendar year gross sales or, if the business has been open for less than a year, the average gross sales of Deer Solution businesses across the system during the year of termination. The franchisee agrees that this calculation is a fair and reasonable form of liquidated damages.

Several specific actions or events can lead to default and termination of the Deer Solution Franchise Agreement. These include conviction of a felony crime by the franchisee or an owner, engaging in intentionally dishonest or unethical conduct that harms Deer Solution's reputation, failure to complete required training programs, failure to notify Deer Solution of breaches of the Confidentiality Agreement, misappropriation or unauthorized use of licensed marks or confidential information, and failure to comply with Anti-Terrorism Laws. In many of these cases, the franchisee has a 10-day period after written notice to cure the default to the satisfaction of Deer Solution and avoid termination of the agreement.

Prospective Deer Solution franchisees should be aware of these termination conditions and the financial implications of defaulting on the agreement. The potential for significant financial liabilities, including lost future revenues, underscores the importance of adhering to the terms of the Franchise Agreement and maintaining ethical business practices. Franchisees should carefully review the conditions that constitute a default and understand their obligations to avoid potential termination and associated penalties.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.