How does Deka Lash account for the Brand Fund balance?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
g)
ITEM 6 OTHER FEES
| Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty (Notes 1 and 2) | 6% of Gross Studio Sales or $600 per month, whichever is greater. After your 1 st year of operations, the minimum Royalty Fee increases to $1,000 per month. | As specified in the operations manual. Currently we collect royalties twice a month on the 5 th day following the end of each semi-monthly period. | |
| Brand | The greater of 3% of Gross Studio Sales or, after the 1 st year of operations, $500 per month. | As specified in the operations manual. Currently we collect royalties twice a month on the 5 th day following the end of each semi-monthly period. | You are required to contribute the specified Brand Development Fee into the Brand Development Fund (the "Brand Fund"). We are not obligated to maintain the Brand Fund in a separate bank account nor use the entirety of amounts collected within the same calendar year. |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, franchisees are required to contribute to the Brand Development Fund, also known as the "Brand Fund." These contributions are either 3% of Gross Studio Sales or, after the first year of operations, a fixed amount of $500 per month, whichever is greater.
While Deka Lash is not obligated to maintain the Brand Fund in a separate bank account or to spend all collected amounts within the same calendar year, they do commit to tracking the Brand Fund balance separately. This means Deka Lash will keep records of collections and expenditures related to the Brand Fund.
For a prospective Deka Lash franchisee, this separate accounting provides a degree of transparency regarding how the Brand Fund is managed, even though the funds are not necessarily held in a dedicated account. Franchisees may want to inquire about the specific details of how these records are maintained and if periodic reports on the Brand Fund's activity are available to franchisees.