What specific article in the Deer Solution Franchise Agreement contains the non-competition covenants mentioned in the transfer restrictions?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained in this Agreement to the contrary, you expressly acknowledge and agree that if you are an Owner, and/or the Spouse of an Owner, that, prior to Transferring an Owner's equity and/or ownership interests in Franchisee that, among other things, Franchisee must notify us and obtain our written consent. Likewise, you acknowledge and agree that under the Franchise Agreement that prior to Franchisee's Transfer of the Franchise Agreement, among other things, Franchisee must notify us and obtain our written consent. For our protection and to prevent the subversion of the non-competition covenants contained in Article 4 of this Agreement and, to induce us to enter into the Franchise Agreement with Franchisee, you agree, that:
- (a) if you are an Owner, should Franchisee fail to properly and timely notify us in writing of the proposed Transfer of your equity and/or ownership interests in Franchisee and/or should Franchisee, fail to obtain our consent to the proposed Transfer of your equity and/or ownership interests in Franchisee (which we may either reject or approve, in accordance with the terms and conditions of the Franchise Agreement), you shall remain subject to the non-competition covenants contained in Article 4 of this Agreement and irrespective of any purported and/or actual Transfer in violation of the terms and conditions of the Franchise Agreement;
- (b) if you are a Spouse, should Franchisee fail to properly and timely notify us in writing of the proposed Transfer of your Spouse's equity and/or ownership interests in Franchisee and/or should Franchisee, fail to obtain our consent to the proposed Transfer of your Spouse's equity and/or ownership interests in Franchisee (which we may either reject or approve, in accordance with the terms and conditions of the Franchise Agreement), you shall remain subject to the non-competition covenants contained in Article 4 of this Agreement and irrespective of any purported and/or actual
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, Article 4 of the Franchise Agreement contains the non-competition covenants and restrictions related to transfer restrictions. Specifically, Item 23 outlines that if an owner or spouse of an owner attempts to transfer equity or ownership interests without proper notification and consent from Deer Solution, they will remain subject to the non-competition covenants in Article 4, even if the transfer occurs in violation of the agreement terms.
This provision is designed to protect Deer Solution from unfair competition that could arise if a franchisee or their spouse transfers their interest to a competitor without the franchisor's approval. By maintaining the non-competition obligations, Deer Solution ensures that individuals with knowledge of their business practices and confidential information cannot immediately use that knowledge to benefit a competing business.
This clause highlights the importance of adhering to the transfer procedures outlined in the Franchise Agreement. Franchisees must properly notify Deer Solution and obtain written consent before transferring any equity or ownership interests. Failure to do so could result in the original owner or spouse remaining bound by the non-competition covenants, regardless of the transfer.
Deer Solution also has the option to modify Article 4, which covers intellectual property, brand protection, and non-competition covenants. These modifications can include limiting prohibited activities, narrowing the definition of a competitive business, shortening the restricted period, reducing the geographic scope, or reducing the scope of any other covenant to ensure the terms are enforceable under applicable law.