What is considered an exception to the abandonment clause for Deka Lash, allowing a franchisee to not operate the business without penalty?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- a) Cease to Actively Engage. If Developer ceases to actively engage in development activities in the Development Area or otherwise abandons its development business for three (3) consecutive months, or any shorter period that indicates an intent by Developer to discontinue development of the Franchised Businesses within the Development Area;
- b) Insolvency. If Developer becomes insolvent, meaning unable to pay bills in the ordinary course of business as they become due;
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, a Deka Lash developer can face termination of their development agreement if they cease to actively engage in development activities or abandon their development business for three consecutive months, or any shorter period that indicates an intent to discontinue development.
Additionally, if the developer becomes insolvent, meaning they are unable to pay bills in the ordinary course of business as they become due, Deka Lash has the right to terminate the agreement. In both scenarios, Deka Lash can terminate the agreement without providing an opportunity for the developer to cure the default, effective immediately upon written notice.
These terms are important for prospective developers to consider, as failure to meet development obligations or facing financial instability can lead to the termination of the development agreement and loss of rights to open and operate future Deka Lash franchises within the designated development area.