What happens to the Deka Lash Development Agreement if any associated Franchise Agreement is terminated?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- d) Termination of Associated Franchise Agreement(s). If any Franchise Agreement that is entered into in order to fulfill Developer's development obligations under this Agreement is terminated or subject to termination by Franchisor, pursuant to the terms of that Franchise Agreement.
Upon termination of this Agreement, Franchisor may establish or license others to establish Deka Lash units and operations within the previously reserved Development Area without limitation or restriction. In addition, Developer's right to open and operate any of the remaining Franchises that have not yet opened for business in the Development Area is revoked and terminated. This means that Developer will have no further right to construct, equip, own, open or operate additional Deka Lash units which are not, at the time of termination or expiration, the subject of a then-existing Franchise Agreement between Franchisor and Developer which is in full force and effect.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, the termination of any Franchise Agreement that is entered into to fulfill the developer's obligations under the Development Agreement, and is subject to termination by Deka Lash, will result in the termination of the Development Agreement. This termination is at the discretion of Deka Lash, pursuant to the terms of that Franchise Agreement.
Upon termination of the Development Agreement, Deka Lash has the right to establish or license others to establish Deka Lash units within the previously reserved Development Area without any restrictions. The developer's right to open and operate any remaining franchises that have not yet opened for business in the Development Area is revoked.
This means the developer loses the right to construct, equip, own, open, or operate additional Deka Lash units that are not already subject to a Franchise Agreement in full force and effect at the time of termination. This clause ensures that Deka Lash can freely develop the territory if the developer fails to meet their obligations or loses their existing franchises.