What is a 'Controlled Entity' in the context of a Deka Lash franchise transfer?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 14.3 Transfer to a Controlled Entity. A "Controlled Entity" is an entity in which you are the beneficial owner of 100% of each class of voting ownership interest. A transfer to a Controlled Entity shall not trigger the Right of First Refusal, described in Section 14.6 below. At the time of the desired transfer of interest to a Controlled Entity, you must notify us in writing of the name of the Controlled Entity and the name and address of each officer, director, shareholder, member, partner, or similar person and their respective ownership interest. We do not charge a transfer fee for this change.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a "Controlled Entity" is defined as an entity where the franchisee is the beneficial owner of 100% of each class of voting ownership interest. This definition is relevant when a franchisee considers transferring their franchise agreement.
Specifically, the FDD states that a transfer to a Controlled Entity does not trigger the Right of First Refusal, which Deka Lash typically holds in franchise transfer scenarios. This means that Deka Lash waives its right to purchase the franchise before another buyer in this specific situation.
To initiate a transfer to a Controlled Entity, the franchisee must provide written notification to Deka Lash. This notification must include the name of the Controlled Entity, as well as the names and addresses of all officers, directors, shareholders, members, partners, or similar individuals, along with their respective ownership interests in the entity. Importantly, Deka Lash does not charge a transfer fee for transfers to a Controlled Entity, which can reduce costs for the franchisee.