What is the geographic scope of the non-exclusivity of the Deka Lash Designated Search Area?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Non-Exclusive Designated Search Area. Unless specified otherwise, we will provide you with a non-exclusive "Designated Search Area" as defined in Section 1 of Schedule 1 of your Franchise Agreement within which you must locate your Franchised Business.
Exclusive Designated Search Area. If your Designated Search Area contains exclusive rights, such as being part of an Area Development Agreement, we will not license anyone the right to open or operate a Franchised Business that is physically located within that Exclusive Designated Search Area. This does not mean you can open or operate a Franchised Business anywhere within that Exclusive Designated Search Area. If a franchisee secures a location near your Exclusive Designated Search Area, and their associated protective radius (generally 1.5 miles) overlaps into your Exclusive Designated Search Area, you will not be able to locate a studio within the protected radius that overlaps your Exclusive Designated Search Area. We will let you know of any existing studios that have protective radius overlapping into your Exclusive Designated Search Area prior to execution of this agreement, but we make no warranties that a franchisee
Source: Item 12 — TERRITORY (FDD pages 40–44)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, franchisees are typically granted a non-exclusive Designated Search Area, as defined in Section 1 of Schedule 1 of the Franchise Agreement, within which they must find a location for their Franchised Business. This means that Deka Lash can have multiple potential franchisees looking for locations within the same Designated Search Area. This contrasts with an Exclusive Designated Search Area, which Deka Lash may grant if the franchisee is part of an Area Development Agreement. In that case, Deka Lash will not license anyone else to open or operate a Franchised Business physically located within that Exclusive Designated Search Area.
However, even with an Exclusive Designated Search Area, a Deka Lash franchisee is not guaranteed the ability to open a Franchised Business anywhere within that area. If another franchisee secures a location nearby, and their 1.5-mile protected radius overlaps into the Exclusive Designated Search Area, the new franchisee will not be able to locate their studio within that overlapping protected radius. Deka Lash states that they will inform franchisees of any existing studios with protected radii overlapping into their Exclusive Designated Search Area before the agreement is executed. However, Deka Lash does not guarantee that a franchisee will not later choose a location that creates a protected radius that overlaps into the Exclusive Designated Search Area.
This non-exclusivity and potential overlap of protected radii can create competition and limit the available locations for a Deka Lash studio, even within a Designated Search Area that was initially considered exclusive. Prospective franchisees should carefully consider these factors and conduct thorough due diligence to assess the availability of suitable locations and the potential for competition from other Deka Lash studios.