Can the Deer Solution Royalty Fee change during a Renewal Term?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
Transfers which in the aggregate Transfers substantially all of the assets of the Franchised Business or a controlling interest in Franchisee, then, at the election of Franchisor and upon notice from Franchisor to Franchisee, the transferee may be required to execute (and/or, upon Franchisor's request, shall cause all interested parties to execute) for a term ending on the expiration date of the original Term of this Agreement, the then current standard form Franchise Agreement offered to new franchisees of Deer Solution Businesses and any other agreements as Franchisor requires. Such agreements shall supersede this Agreement and its associated agreement in all respects, and the terms of Franchisor's then current agreements may differ from the terms in this Agreement, provided that such agreements shall provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
Based on the 2025 Deer Solution Franchise Disclosure Document, if a franchisee transfers their business, the transferee may be required to execute the current standard form franchise agreement, which may have different terms than the original agreement. However, the new agreement must provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations as the original agreement. This condition applies when a transfer involves substantially all of the assets or a controlling interest in the franchise.
This means that while other terms might change upon transfer to a new franchisee, the core financial obligations, including the Royalty Fee and Advertising Contributions, should remain consistent with the initial agreement. This provides some financial predictability for the transferee, as these key costs are fixed to the original terms. However, the transferee will likely need to cover costs associated with upgrading the Administrative Office to current standards and completing any required training programs.
For a prospective Deer Solution franchisee, this indicates that the Royalty Fee is intended to remain stable during the original term, even if the franchise changes hands. However, this excerpt does not address whether the Royalty Fee can change during a renewal term. Franchisees should clarify with Deer Solution whether the royalty fee can change upon renewal of the franchise agreement.