What is the Deka Lash franchisee's obligation if Deka Lash issues a client refund?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
----------------------| | Fee Taxes and Indebtedness | Amount You will pay all taxes, assessments, liens, encumbrances, accounts, and other debts, regardless of their nature, assessed against you, the Franchise Premises, or inventory, materials, fixtures, and equipment used in your | Due Date Payment will be made when due and before delinquent except when being contested in good faith by appropriate proceedings. | Remarks If we are charged with any tax by the authorized taxing authority of any state or municipality, including taxes on sales made to or licenses granted to you, or sales made by you at the Franchise Premises, you will pay those taxes and otherwise agree to allow us to deduct any amounts we paid. We do not charge royalty or Brand Development Fees on sales tax. | | Sales, excise | Franchise. Actual amount incurred. | At time of payment of fees to us which are subject to any tax. | If required by the federal, state or locality in which your franchise is located. Including sales, excise or gross receipts tax or similar type tax on the initial franchise fee, royalty, training, Brand Development Fee, products, and any other services, products or fees. | | or gross | | | | | receipts tax | | | | | Assistance | Reimbursement for reasonable expenditures incurred including travel, lodging, per diem and wages. | At time of expense. | In the event of your death or incapacity, we are entitled to reimbursement from you or your estate for any reasonable expenses incurred continuing services. | | Fee in the | | | | | event of death | | | | | or incapacity | | | | | Client Refunds | The amount of any fee we refund to a client. | At time of payment.
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, if a franchisee fails to resolve a client service complaint and Deka Lash believes there is a reasonable basis for a refund, Deka Lash may issue a refund to the client. In such cases, Deka Lash will then bill the franchisee for the amount of the refund. The franchisee is obligated to pay this charge. This is listed under the 'Client Refunds' fee in Item 6.
This policy means that Deka Lash retains the authority to make decisions regarding client refunds if a franchisee is unable to resolve a complaint. While this could ensure consistent customer service standards across all franchise locations, it also places the financial burden of refunds on the franchisee, even if they disagree with Deka Lash's assessment.
Franchisees should ensure they have robust customer service protocols in place to address complaints promptly and effectively. Understanding the criteria Deka Lash uses to determine a 'reasonable basis' for a refund is also crucial. A franchisee may want to clarify with Deka Lash what recourse they have if they disagree with a refund decision made by Deka Lash.
This type of clause is not uncommon in franchising, as franchisors often want to maintain brand reputation and customer satisfaction. However, franchisees should carefully consider the potential financial impact of such policies and ensure they have adequate resources to handle potential refund requests.