Is the Deka Lash Development Fee in addition to the initial franchise fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
velopers**
At our discretion, we may offer to qualified candidates an Area Development Agreement, attached to this Franchise Disclosure Document as Exhibit C, according to which the area developer ("Area Developer") obtains the right to develop and operate a prescribed number of Franchised Businesses over an agreed-upon period of time. Currently, we offer qualified candidates the right to enter into an Area Development Agreement to operate multiple Franchised Businesses in a quantity from 2-10, with the payment of the development fee ("Development Fee"), which is in lieu of the initial franchise fee, as follows:
| Number of Franchised Businesses | Development Fee |
|---|---|
| 2 Franchised Businesses | $97,900 |
| 3 Franchised Businesses | $114,900 |
| 4 Franchised Businesses | $148,900 |
| 5 Franchised Businesses | $179,900 |
| 6 Franchised Businesses | $210,900 |
| 7 Franchised Businesses | $241,900 |
| 8 Franchised Businesses | $272,900 |
| 9 Franchised Businesses | $303,900 |
| 10 Franchised Businesses |
Source: Item 5 — INITIAL FEES (FDD pages 12–15)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Development Fee is paid by Area Developers and is in lieu of the initial franchise fee. An Area Developer obtains the right to develop and operate a prescribed number of Franchised Businesses over an agreed-upon period of time.
The Development Fee varies depending on the number of franchises the Area Developer commits to open. For example, the Development Fee for 2 Franchised Businesses is $97,900, while the fee for 10 Franchised Businesses is $334,900. These fees are fully earned and non-refundable upon signing the Development Agreement and receipt of funds by Deka Lash.
If the Area Developer fails to complete the initial training program or fails to open the franchises within the agreed-upon time limits, Deka Lash has the right to terminate the Area Development Agreement and retain the entire Development Fee. This highlights a significant financial risk for Area Developers, as they could lose a substantial investment if they are unable to meet the development obligations outlined in the agreement.