For a Deka Lash Area Development Agreement to operate 5 Franchised Businesses, what is the Development Fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
follows:
| Number of Franchised Businesses | Development Fee |
|---|---|
| 2 Franchised Businesses | $97,900 |
| 3 Franchised Businesses | $114,900 |
| 4 Franchised Businesses | $148,900 |
| 5 Franchised Businesses | $179,900 |
| 6 Franchised Businesses | $210,900 |
| 7 Franchised Businesses | $241,900 |
| 8 Franchised Businesses | $272,900 |
| 9 Franchised Businesses | $303,900 |
| 10 Franchised Businesses |
Source: Item 5 — INITIAL FEES (FDD pages 12–15)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Development Fee for an Area Development Agreement to operate 5 franchised businesses is $179,900. This fee is in lieu of the initial franchise fee typically charged for a single-unit franchise.
The Development Fee is paid when signing the Area Development Agreement and is considered fully earned and non-refundable once Deka Lash receives the funds. This means that regardless of whether the franchisee successfully opens all five locations or completes the training program, Deka Lash is entitled to keep the entire $179,900.
It is important for prospective Deka Lash area developers to understand the terms and conditions of the Area Development Agreement, including the timeline for opening the franchised businesses. Failure to meet these obligations could result in termination of the agreement and forfeiture of the Development Fee. This is a significant financial risk that potential franchisees should carefully consider before entering into an Area Development Agreement with Deka Lash.