What is the cure period for failing to meet the development schedule for Deka Lash?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- c) Failure to Meet Development Schedule. If Developer fails to meet its development obligations under the Development Schedule for any Development Period, and fails to cure such default within 30 days of receiving notice thereof; and
- d) Termination of Associated Franchise Agreement(s). If any Franchise Agreement that is entered into in order to fulfill Developer's development obligations under this Agreement is terminated or subject to termination by Franchisor, pursuant to the terms of that Franchise Agreement.
Upon termination of this Agreement, Franchisor may establish or license others to establish Deka Lash units and operations within the previously reserved Development Area without limitation or restriction. In addition, Developer's right to open and operate any of the remaining Franchises that have not yet opened for business in the Development Area is revoked and terminated. This means that Developer will have no further right to construct, equip, own, open or operate additional Deka Lash units which are not, at the time of termination or expiration, the subject of a then-existing Franchise Agreement between Franchisor and Developer which is in full force and effect.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, if a developer fails to meet their development obligations under the Development Schedule, they have 30 days to cure the default after receiving notice. If the developer does not cure the failure within this 30-day period, it can lead to termination of the Development Agreement.
Upon termination, Deka Lash has the right to establish or license others to establish Deka Lash units within the previously reserved Development Area without any restrictions. Additionally, the developer's right to open and operate any remaining franchises that have not yet opened for business in the Development Area is revoked. This means the developer loses the right to construct, equip, own, open, or operate additional Deka Lash units that are not already subject to an existing Franchise Agreement.
This clause is significant for prospective Deka Lash multi-unit franchisees as it outlines the consequences of not adhering to the agreed-upon development schedule. The loss of development rights and the potential for Deka Lash to establish competing units in the area represent a substantial risk. Therefore, franchisees need to carefully consider their ability to meet the development schedule and have contingency plans in place to avoid defaulting on their obligations.