Is the Designated Search Area for a Deka Lash franchise exclusive?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Unless specified otherwise, we will provide you with a non-exclusive "Designated Search Area" as defined in Section 1 of Schedule 1 of your Franchise Agreement within which you must locate your Franchised Business.
Exclusive Designated Search Area. If your Designated Search Area contains exclusive rights, such as being part of an Area Development Agreement, we will not license anyone the right to open or operate a Franchised Business that is physically located within that Exclusive Designated Search Area. This does not mean you can open or operate a Franchised Business anywhere within that Exclusive Designated Search Area. If a franchisee secures a location near your Exclusive Designated Search Area, and their associated protective radius (generally 1.5 miles) overlaps into your Exclusive Designated Search Area, you will not be able to locate a studio within the protected radius that overlaps your Exclusive Designated Search Area. We will let you know of any existing studios that have protective radius overlapping into your Exclusive Designated Search Area prior to execution of this agreement, but we make no warranties that a franchisee
Source: Item 12 — TERRITORY (FDD pages 40–44)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Designated Search Area is typically non-exclusive. The FDD states, "Unless specified otherwise, we will provide you with a non-exclusive 'Designated Search Area' as defined in Section 1 of Schedule 1 of your Franchise Agreement within which you must locate your Franchised Business." This means that Deka Lash may allow other franchisees or company-owned locations to search for locations within the same Designated Search Area as you, increasing competition during the site selection process.
However, there is an exception where the Designated Search Area can be exclusive. If a franchisee enters into an Area Development Agreement, the Designated Search Area may contain exclusive rights. In this case, Deka Lash will not license anyone else the right to open or operate a Franchised Business physically located within that Exclusive Designated Search Area.
Even with an Exclusive Designated Search Area, a franchisee cannot simply open a Deka Lash studio anywhere within that area. If another franchisee secures a location nearby, and their 1.5-mile protected radius overlaps into the Exclusive Designated Search Area, the new franchisee will not be able to locate their studio within that overlapping protected radius. Deka Lash states that they will inform franchisees of any existing studios with protected radii overlapping into their Exclusive Designated Search Area before the agreement is executed, but they do not guarantee that a franchisee will not later choose a location that creates such an overlap. Therefore, even with an exclusive search area, franchisees need to be aware of potential limitations and competition from nearby locations.