What are the Deka Lash franchisee's obligations regarding complying with the terms of the franchise agreement (Item 9) and how does this relate to the franchisor's right to inspect the franchise premises (Item 12)?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
ASE OF PRIOR CLAIMS | 33 | | 21. NOTICES | 33 | | 22. ACKNOWLEDGMENTS | 33 | | 23. GUARANTY | 34 | | SCHEDULE 1 – PROTECTED AREA | 37 | | SCHEDULE 2 - OWNERSHIP ADDENDUM | 40 | | SCHEDULE 3 - STATE ADDENDA | 43 |
WHEREAS, DL Franchising, LLC d/b/a Deka Lash ("Deka Lash," "we," "us," or "our") offers a franchise program to operate studios which offer eyelash extension, eyebrow, and skincare services and related products ("System"). Our system utilizes specified marketing techniques and operating procedures; and
WHEREAS, Franchisee and all Signators identified on the signature page to this Agreement, in your personal capacity, (collectively "Franchisee," "you," or "your") desire to utilize our System and our trade names, service marks, and trademarks (collectively, the "Marks"); and
NOW, THEREFORE, for value received, Deka Lash and Franchisee ("the Parties") agree as follows:
1. GRANT OF FRANCHISE
Subject to the terms of this franchise agreement ("Agreement" or "Franchise Agreement"), we grant to you a Deka Lash franchise ("Franchised Business") using our system and our Marks in the protected area described in Schedule 1 ("Protected Area"). You agree to abide by the terms of this Agreement.
2. TERM AND RENEWAL
- 2.1. Term. Subject to the terms and conditions of this Agreement, we grant to you and you accept from us, the Franchise, license, and privilege to use the Marks, the System, and marketing materials bearing the Marks, for 10 years from the "Effective Date" of this Agreement, as designated on the signature page to this Agreement.
- 2.2 Renewal of Franchise. If you are not in breach of this Agreement, and if you meet the following conditions, and if we are still offering franchises in your geographic area at the time, you may renew the Franchise under the terms of our then-current Franchise Agreement: You must:
- a. Be in good standing and full compliance.
- b. Have satisfied all monetary obligations.
- c. Give notice at least 3 months and not more than 6 months before the end of the Franchise term established by this Agreement.
- d. Execute a general release, in a form we prescribe, following applicable law, to release us from any claims you may have against us.
- e. Execute our then-current Franchise Agreement within 30 days after it is delivered to you. If you do not, we may conclude that you do not intend to renew. You may be asked to sign a contract with materially different terms and conditions than your original contract.
- f. Pay the renewal fee of $3,500.
- q. Successfully complete any retraining program we require at your expense.
- 2.3 Renewal Acknowledgements.
What This Means (2024 FDD)
Based on the 2024 Deka Lash Franchise Disclosure Document, franchisees must adhere to the terms of the franchise agreement. The agreement grants Deka Lash franchisees the right to operate a Deka Lash franchise using the Deka Lash system and marks within a protected area, contingent upon abiding by the agreement's terms. Franchisees must also adhere to Deka Lash's operations manual and system standards, which Deka Lash considers essential to the operation of all franchised businesses and the overall system.
Furthermore, the franchisee's obligations extend to ensuring that a designated Principal Owner, with at least 10% ownership, is responsible for the business and communication with Deka Lash, possessing the authority to manage transactions and agreements. All holders of ownership interest must agree to fulfill the obligations under the franchise agreement, including executing a personal guaranty, confidentiality agreement, and a covenant not to compete. Spouses are also required to guarantee the obligations under the franchise agreement.
Regarding inspections, the FDD states that Deka Lash has the right to inspect the premises to ensure compliance with the franchise agreement. Specifically, Deka Lash or its agents have the right to enter the premises at all reasonable times without prior notice to inspect the studio, meet with the franchisee, employees, and customers, and evaluate the services being provided. This includes the right to observe and evaluate all aspects of the services offered, including eyelash extensions, eyebrow services, skincare, product sales, and other beauty-related services.
The franchisee must cooperate with Deka Lash during these inspections and provide access to all areas of the premises, as well as any information or documents requested. Deka Lash's right to inspect the premises is tied to the franchisee's obligation to comply with the terms of the franchise agreement, ensuring that the franchisee is operating the business in accordance with Deka Lash's standards and procedures. This allows Deka Lash to protect its brand and maintain consistency across all franchise locations.