What must happen for the 'Effective Date' to occur regarding a Deka Lash franchise?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
6. TERM AND TERMINATION
- 6.1 Term. This Agreement will commence as of the date it is fully executed and, unless earlier terminated by us, will end on the earlier of a) the last day of the calendar month that the final Franchised Business is required to be opened and operating under the Development Schedule or b) the date you execute a lease for the final Franchised Business required to be opened and operating under the Development Schedule. Upon expiration or termination of this Agreement for any reason, you will not have any rights within the Development Area other than the territorial rights granted in the franchise agreement executed in connection with any Franchised Businesses that you have opened and commenced operating as of the date this Agreement is terminated or expires.
- 6.2 Termination. Any material violation or breach of any Franchise Agreement or this Agreement will be deemed a material violation of this Agreement and any and all Franchise Agreements between the parties. The non-breaching party will be entitled to enforce the penalties of or to terminate this Agreement or the relevant Franchise Agreement(s) as provided in the relevant Franchise Agreement(s) for enforcement or termination. In addition, Franchisor will have the right, at its option, to terminate this Agreement and all rights granted to Developer hereunder, without affording Developer any opportunity to cure such default, effective upon written notice to Developer, upon the occurrence of any of the following events:
- a) Cease to Actively Engage. If Developer ceases to actively engage in development activities in the Development Area or otherwise abandons its development business for three (3) consecutive months, or any shorter period that indicates an intent by Developer to discontinue development of the Franchised Businesses within the Development Area;
- b) Insolvency. If Developer becomes insolvent, meaning unable to pay bills in the ordinary course of business as they become due;
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, the franchise agreement commences on the date it is fully executed. Unless terminated earlier by Deka Lash, the agreement will end on the earlier of two conditions: either the last day of the calendar month when the final franchised business is required to be opened and operating under the development schedule, or the date the franchisee executes a lease for the final franchised business required to be opened and operating under the development schedule.
Upon the expiration or termination of the agreement, the franchisee will not have any rights within the development area, except for the territorial rights granted in the franchise agreement connected with any franchised businesses that the franchisee has opened and commenced operating as of the termination or expiration date. This means that the franchisee's rights to develop new Deka Lash locations in the area cease, but their rights to operate existing locations may continue under their individual franchise agreements.
Any significant violation or breach of any Franchise Agreement or the Area Development Agreement will be considered a material violation of both agreements. The non-breaching party has the right to enforce penalties or terminate the agreement or relevant franchise agreements as provided in the franchise agreements. Additionally, Deka Lash has the right to terminate the agreement and all rights granted to the developer without allowing an opportunity to cure the default, effective immediately upon written notice, if the developer ceases to actively engage in development activities, abandons the development business for three consecutive months, or becomes insolvent.