What happens if a Deka Lash franchisee fails to meet the minimum sales volume?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- c) Failure to Meet Development Schedule. If Developer fails to meet its development obligations under the Development Schedule for any Development Period, and fails to cure such default within 30 days of receiving notice thereof; and
- 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)
Based on the 2024 Deka Lash Franchise Disclosure Document, the document outlines the repercussions for a developer's failure to meet the development schedule, which includes specific obligations for opening Franchised Businesses within a Development Area. If a Deka Lash developer fails to meet these obligations within the set Development Period and does not rectify the situation within 30 days of receiving notice, it constitutes a default.
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. Additionally, the developer's right to open and operate any remaining franchises that have not yet commenced business operations in the Development Area is revoked and terminated.
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 fully active Franchise Agreement between the franchisor and the developer at the time of termination or expiration. This clause ensures Deka Lash can maintain its growth strategy and brand presence, while also setting clear expectations and consequences for developers who do not meet their agreed-upon development milestones.