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What are the specific obligations of a Deer Solution franchisee regarding the maintenance of operational standards (Item 8), and what are the potential consequences for failing to do so as outlined in Item 6, considering the restrictions on sources of products and services (Item 8), the reporting requirements (Item 6), and the territory outlined in Item 12?

Deer_Solution Franchise · 2025 FDD

Answer from 2025 FDD Document

At all times, Franchisee's Deer Solution Business shall: (a) be operated within Franchisee's Operating Territory, excluding Closed Markets; (b) be operated from an approved Administrative Office located within the Operating Territory; (c) exclusively offer, sell and provide the Approved Services and Products in accordance with Franchisor's standards, specifications, and requirements; (d) ensure that the Approved Services and Products are only offered and provided by Franchisee through employees and/or Owners that have, to Franchisor's satisfaction, completed the training requirements and Training Programs required by Franchisor; (e) exclusively use, maintain, and, stock in inventory, the System Supplies in such quantities as designated by Franchisor; (f) exclusively purchase the System Supplies from the supplier and/or suppliers, vendor and/or vendors approved by Franchisor and designated by Franchisor, in Franchisor's Reasonable Business Judgment; (g) be exclusively managed and operated by Franchisee or, if Franchisee is a Corporate Entity, Franchisee's Managing Owner; (h) maintain the necessary licenses and permits and, those licenses and permits required, and/or recommended by Franchisor, for Franchisee's development, ownership, and operation of the Franchised Business; (i) exclusively provide and, if applicable, deliver, the Approved Services and Products from Deer Solution Service Vehicles; and (j) be operated in conformity with Franchisors standards, specifications, criteria and requirements as set forth by Franchisor in the Operations Manual as such Operations Manual exists as of the Effective Date of this Agreement and as the Operations Manual may be modified and supplemented from time to time in the future by Franchisor, in Franchisor's Reasonable Business Judgment.

We require that you purchase or lease certain source restricted goods and services for the development and operation of your Deer Solution Business. Source restricted goods and services are goods and services that must meet our specifications and/or must be purchased from an approved or designated supplier. We may designate a supplier (which may include us or our affiliates) as the exclusive supplier for the System. Our specifications and list of approved and designated suppliers is contained in our Manuals. We will notify you of any changes to our specifications or list of approved or designated suppliers. We may notify you of these changes in various ways, including written or electronic correspondence, amendments, and updates to our Manuals, verbal, and other forms of communication. We formulate and modify our standards and specifications for products and services based on our industry experience and our management decisions as to the overall operation and expansion of the System.

We currently require that you purchase or lease the following source restricted goods and services from either us or our designated supplier:

    1. System Supplies You must maintain an initial and ongoing inventory of System Supplies. You must purchase the System Supplies from us, our affiliates, or our designated suppliers.
    1. Branded Items and Marketing Materials All materials bearing the Licensed Marks including, but not limited to, stationary, business cards, brochures, apparel, signs and displays, must meet our standards and specifications, and must be purchased from either us directly or our designated suppliers. All of your marketing materials must comply with our standards and specifications and must be approved by us before you use them. You may market your Deer Solution Business through approved digital media and social media platforms provided that you do so in accordance with our digital media and social media policies. You must purchase all branded marketing materials from either us or our designated exclusive supplier. We may require that you exclusively use, at your cost, our designated supplier for social and digital media marketing services and exclusively use, at your cost, our social media platforms, vendors, and marketing channels.
    1. Business Management System and Computer Equipment Currently you are required to purchase, license, and utilize a business management system as designated in our operations manual. You must purchase and maintain a computer system at your Administrative Office. In general, you will be required to obtain a computer system that will consist of certain hardware, software, and peripheral devices such as printers. You will be required to meet our requirements involving back office and business management systems, security systems, printers, back-up systems, and high-speed internet access.
    1. Credit Card Processing You must use our designated supplier and vendor for credit card processing which may be integrated with the business management system that we designate. Credit card processing fees will, generally, be based on a percentage of all credit card processed Gross Sales.
    1. Computer System You must purchase and maintain a computer system at your Administrative Office and an Android tablet and Android phone that maintains cellular internet access for each dispatched user / service vehicle that you operate. In general, you will be required to obtain a computer system that will consist of certain hardware, software, and peripheral devices such as printers. You will be required to meet our requirements involving back office and business management systems, security systems, printers, back-up systems, and high-speed internet access.
    1. Sales and Support Center Services We are the exclusive supplier of the Sales and Support Center Services that you are required to use. Our Sales and Support Center includes phone based communications and includes other forms of customer engagement focused on new customer inquiries, scheduling estimate and service visits, responding to customer service issues, customer support, and billing for services. We reserve the right to change vendors of the Sales and Support Center Services. On a weekly basis, you must pay Sales and Support Center Fees to us. We reserve the right to deduct up to 8.5% of Gross Sales on a weekly basis for Sales and Support Center Fees. During the fiscal year ending December 31, 2024, we earned $47,361.19 in revenue for the Sales and Support Center Services.
    1. Service Vehicles Your service vehicles must meet our standards and specifications, be designated and insured for commercial purposed, and be wrapped with our approved branding and vehicle wrap. You may only operate your Deer Solution Business from service vehicles that meet our specifications and approved wrap.

We may establish, update and provide you with consultations and communications as to the standards, procedures and System requirements as to the operation of your Deer Solution Business including, but not limited to, Approved Services and Products, System Supplies, marketing and promotion standards, and as we may, in our discretion, designate, modify, supplement and amend from time to time and, as set forth in the Manuals. (Franchise Agreement, Articles 4.B. and 4.C.);

We may require that you and your Operating Manager participate in supplemental on-site training that we may designate and require in our discretion. If you are not meeting what we believe to be System performance standards, we may provide, in our discretion, supplemental training on-site within your Operating Territory. You will be required to pay our then current supplemental training fee, which is currently $500, per on-site trainer, per day, plus travel expenses, meals and accommodation expenses incurred by us. (Franchise Agreement, Article 4.A.);

What This Means (2025 FDD)

According to Deer Solution's 2025 Franchise Disclosure Document, franchisees must adhere to strict operational standards to maintain the quality and consistency of the Deer Solution brand. Franchisees are obligated to operate within their designated territory, exclusively offering and selling approved services and products that meet Deer Solution's standards. These services and products must be provided by trained employees or owners who have completed the required training programs. Franchisees must exclusively use and maintain the System Supplies in designated quantities, purchasing them only from approved suppliers. The Deer Solution business must be managed and operated by the franchisee or, if the franchisee is a corporate entity, by the Managing Owner. Franchisees must also maintain all necessary licenses and permits required for operation. Service vehicles must meet Deer Solution's brand standards and specifications and be properly maintained.

Deer Solution emphasizes control over sourcing, requiring franchisees to purchase or lease specific goods and services from approved or designated suppliers. This includes system supplies, branded items, marketing materials, business management systems, computer equipment, credit card processing services, and sales and support center services. Some of these, like the Sales and Support Center Services, are exclusively supplied by Deer Solution, with fees potentially reaching up to 8.5% of Gross Sales, deducted weekly. Franchisees must use designated vendors for credit card processing, with fees based on a percentage of gross sales. They are also required to use Deer Solution's Sales and Support Center, which includes various customer engagement services.

Deer Solution may update and communicate operating standards, marketing standards, and approved vendor lists. Franchisees may be required to attend an annual system conference and participate in supplemental on-site training, especially if they are not meeting system performance standards. This supplemental training incurs a fee of $500 per on-site trainer per day, plus associated travel, meals, and accommodation expenses. Failure to comply with these standards and restrictions could lead to consequences detailed in Item 6 of the Franchise Agreement, though the specific penalties are not detailed in the provided excerpts.

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.