What is the geographic scope of the exclusivity of the Deka Lash Protected Area?

According to Deka Lash's 2024 Franchise Disclosure Document, a franchisee will have a Protected Area around their Franchised Business, as stated in Schedule 1, Section 3 of the Franchise Agreement. The size of the Protected Area can vary, but it is generally a 1.5-mile radius. However, Deka Lash retains the right to adjust the size of the Protected Area based on the demographics and development of each market. For instance, in densely populated urban areas, the Protected Area may be smaller than the standard 1.5-mile radius. Once established, Deka Lash cannot alter the Protected Area without the franchisee's consent, even if the population within the area increases.

The Protected Area provides an exclusive territory where Deka Lash will not establish another company-owned or franchised outlet selling similar goods or services under the same trademarks. However, this exclusivity does not extend to marketing efforts, as these are difficult to confine to a specific geographic area. Deka Lash and its affiliates retain certain rights within the Protected Area, including the right to sell approved products and services through alternative channels of distribution, such as the internet, using their principal trademarks or different trademarks, without compensating the franchisee for orders solicited or accepted within their territory. They also reserve the right to acquire or be acquired by competing systems, even those with units located within the franchisee's Protected Area, and to develop other business systems using different names or marks.

For franchisees entering into an Area Development Agreement, they gain the right to own and operate multiple Deka Lash franchises within a Development Area, following a mandatory Development Schedule. Provided the franchisee complies with the terms of the Area Development Agreement and the Franchise Agreements for each location, Deka Lash grants an exclusive territory within the Development Area where they will not locate another Deka Lash studio operating under similar marks, whether franchised or affiliate-owned. However, this does not guarantee the ability to open a franchise anywhere within the Development Area, as existing studios may have protective radii that overlap, limiting potential locations. Deka Lash will inform the franchisee of any existing studios with overlapping protective radii before the agreement is executed but does not guarantee that new franchisees will not later choose locations that create overlapping radii.