What is the exclusive territory granted to a Deka Lash franchisee during the term of the agreement?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Subject to the terms and conditions set forth herein, we grant you the right, and you undertake the obligation, to develop and establish multiple Franchised Businesses within the Development Area described in the data sheet attached hereto as Appendix 1 (the "Data Sheet"), provided you open and commence operations of such Franchised Businesses in strict accordance with the mandatory Development Schedule set forth in the Data Sheet (the "Development Schedule").
During the term of this Agreement, and except as provided herein, we grant to you an exclusive territory in which we will not open or operate or license any third party the right to open or operate, any Franchised Business offering the same or similar goods or services under the same or similar Marks as we license you to use, that is physically located within the Development Area.
- 1.2 Non-Contiguous Development Areas.
We generally require that development areas be contiguous.
If you are awarded a Development Area with non-contiguous sections, each non-contiguous section will be assigned a number of franchise locations to be opened and operating in the associated non-contiguous area.
Once you have executed the last lease for the required number of franchise locations required to be opened and operating in the specified non-contiguous area, your territorial protections associated with this non-contiguous Development Area will be terminated, and you will not have any rights or protections within the associated non-contiguous section of your Development Area other than the territorial rights granted in connection with any Franchised Businesses that you have opened and commenced operating within this non-contiguous Development Area.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, a franchisee is granted an exclusive territory within a defined Development Area. During the agreement's term, Deka Lash commits not to operate or license others to operate a Franchised Business offering similar goods or services under similar Marks within the franchisee's Development Area. This exclusivity is subject to the franchisee opening and operating Franchised Businesses in strict accordance with a mandatory Development Schedule.
However, this exclusivity may be impacted if the Development Area consists of non-contiguous sections. Once the franchisee executes the last lease for the required number of franchise locations in a non-contiguous area, the territorial protections for that specific non-contiguous section terminate. After this termination, the franchisee only retains territorial rights connected to the Franchised Businesses they have already opened and are operating within that non-contiguous Development Area.
It's important to note that Deka Lash generally prefers Development Areas to be contiguous. The franchise agreement specifies that Deka Lash and its affiliates retain rights not expressly granted to the franchisee. This includes the right to sell approved products and services through alternative channels of distribution, such as the internet, even within a franchisee's protected area. Deka Lash also reserves the right to acquire competing systems, even those located within a franchisee's Protected Area, and to develop other business systems under different names or marks.