How does Deka Lash collect the Delayed Opening Fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
obligations owed to us, (b) in compliance with your franchise agreement(s) and (c) showing a good faith effort in trying secure and open your next scheduled studio, then the following will occur:
- a) Extension with Release (6 months). Per written notice to us and execution of a general release in our favor, we will grant you a one-time, six-month extension to your development schedule with no Delayed Opening Fee. This six-month extension can only be used once during your development agreement and delays all subsequent development dates by 6 months.
- b) Delayed Opening Fee Assessed (for up to 12 months). For each month you are behind on your Development Schedule (Extension with Release excluded), you will be charged a Delayed Opening Fee of $500 for each studio when that studio becomes due. For example, if you have 3 undeveloped units behind schedule, your Delayed Opening Fee will be $1,500 per month. This Development Schedule Extension Fee must be paid to us with our then-current royalty collections process. For each month this is paid, your development schedule for each of those unit rights will be extended by one month. We will allow you to pay a Delayed Opening Fee for up to 12 months.
- c) Loss of Protected Territory. If at any point you (a) do not pay your delayed opening fee, (b) stop or refute our ability to ACH this transaction, (c) notify us, in writing, tha
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Delayed Opening Fee is collected through the brand's then-current royalty collections process. This fee is assessed if a franchisee is behind on their Development Schedule, with a charge of $500 per studio for each month of delay. For instance, if a franchisee has three undeveloped units behind schedule, the Delayed Opening Fee would amount to $1,500 per month.
Paying the Delayed Opening Fee extends the development schedule for each unit right by one month, and Deka Lash allows franchisees to pay this fee for up to 12 months. However, there are consequences for non-payment or attempts to circumvent the payment process.
Specifically, a franchisee will lose their protected territory rights if they (a) do not pay the delayed opening fee, (b) stop or refute Deka Lash's ability to process the payment via ACH, or (c) notify Deka Lash in writing that they no longer want to be charged the fees. Additionally, after 12 months of paying the delayed opening fee, the protected territory rights are also forfeited. Deka Lash also reserves the right to revise these options at any time.
Furthermore, Deka Lash can immediately terminate the territory and remaining development rights if the franchisee is not current on their obligations, not in compliance with their agreements, or not showing a good faith effort to secure and open their next scheduled studio.