If an application to continue operating a Deka Lash franchise after the franchisee's death or incapacity is rejected, how is the transfer deadline computed?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
o reimbursement from you or your estate for any reasonable expenses incurred continuing services from the date of your death or incapacity until transfer or termination. The term "incapacity" means a condition that prevents you from reasonably carrying out your duties under this Agreement. Within ninety days of the event, the heirs, beneficiaries, devisees or legal representatives of that individual, partner, member or shareholder will complete one of the following:
a) Assume and Continue Operations. Apply to us for the right to continue to operate the Franchise for the duration of the term of this Agreement. The right to continue will be granted upon the fulfillment of all of the conditions set forth in this section (except that no Transfer Fee will be required).
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, in the event of the death or incapacity of a franchisee, their heirs, beneficiaries, devisees, or legal representatives have 90 days from the date of the event to apply for the right to continue operating the franchise. This applies if the franchisee is an individual, a general partner in a partnership, or a member/shareholder owning 50% or more of a limited liability company or corporation.
If the application to continue operations is properly made but rejected by Deka Lash, the representatives then have a specific timeframe to transfer the franchise. This timeframe is either 180 days from the date of death or incapacity, or 90 days from the date that Deka Lash notifies them of the rejection, whichever is longer. This provision ensures that the representatives have adequate time to find a suitable buyer and complete the transfer process, even if their initial application to continue operating the franchise themselves is denied.
During the period between the franchisee's death or incapacity and the transfer or termination of the franchise, Deka Lash is entitled to reimbursement for any reasonable expenses incurred in continuing services. This reimbursement would come from the franchisee's estate. This clause protects Deka Lash from incurring losses while the franchise's future is being decided and transitioned.