What disclaimer does Deka Lash make regarding future franchisee locations overlapping the Development Area?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
If a franchisee secures a location near your development area, and their associated protective radius (generally 1.5 miles) overlaps into your Development Area, you will not be able to locate a studio within the protected radius that overlaps your Development Area.
We will let you know of any existing studios that have a protective radius overlapping into your Development Area prior to execution of this agreement, but we make no warranties that a franchisee will not subsequently choose a location that creates a protective radius that overlaps into the Development Area.
Speed is of the essence.
In a case where multiple franchisees have a similar search area, or search areas near each other, the first franchisee to secure a location and create a protective radius, as defined herein, gets the protective rights of that radius area and the other franchisees must adapt their location search accordingly.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, Deka Lash may inform a franchisee of existing studios with a protective radius overlapping the Development Area before the agreement is executed. However, Deka Lash offers no guarantee that another franchisee will not later choose a location that results in their protective radius overlapping the Development Area. The standard protective radius is generally 1.5 miles.
This means that while Deka Lash will disclose any known overlaps at the time of signing the agreement, there is a risk that future Deka Lash franchisees could select locations that encroach upon the Development Area. This could limit the areas where a franchisee can establish a Deka Lash studio.
To mitigate this risk, Deka Lash emphasizes that "speed is of the essence" when securing a location. The first franchisee to secure a location and establish a protective radius maintains those protective rights, which forces other franchisees to adjust their location search accordingly. This highlights the importance of quickly identifying and securing a prime location to avoid potential conflicts with other franchisees' territories. Prospective franchisees should carefully consider this factor and conduct thorough market research to identify suitable locations promptly.