What must a Deka Lash franchisee do to allow the release of funds held in escrow?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Due to our financial condition, the Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to establish an escrow account for all initial franchise fees that we charge. You shall make your check for franchise fees or other payments to the depository (Truist Bank) and send the check to us. Within two business days of our receipt of the check, we will deposit the check into an escrow account that we have established with Truist.Bank.
When we complete all of our pre-opening obligations to you (listed in Item 11 of this Disclosure Document), we will request that you affirm, in writing, that we have completed those obligations and that you assent to release of the funds held in escrow. After receipt of authorization from the Commission, the depository shall release the funds held in escrow by the depository to us to be applied to your account with us.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, if a franchisee is operating in Virginia, Deka Lash is required to establish an escrow account for all initial franchise fees due to their financial condition. The franchisee must make their check for franchise fees or other payments to Truist Bank and send the check to Deka Lash. Within two business days of receipt, Deka Lash will deposit the check into the escrow account with Truist Bank.
To release the funds, once Deka Lash completes all pre-opening obligations to the franchisee (as listed in Item 11 of the FDD), Deka Lash will request that the franchisee affirm in writing that Deka Lash has completed those obligations. The franchisee must then provide written consent to release the funds held in escrow.
After receiving authorization from the Virginia State Corporation Commission, the depository (Truist Bank) will release the funds held in escrow to Deka Lash. These funds will then be applied to the franchisee's account with Deka Lash. This process ensures that the franchisee's initial investment is protected until Deka Lash fulfills its pre-opening responsibilities, providing a safeguard for franchisees in Virginia.