What is the impact on the Deka Lash development schedule if the six-month extension is used?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
achievement of a certain sales volume, market penetration or any other contingency. However, you can lose all rights to the undeveloped portion of a development area for failure to meet a development schedule.
Area Development Schedule Extension & Fees. In the event that you fail to meet your Area Development obligations under your Area Development Agreement, and you are (a) current on your obligations owed to us, (b) in compliance with your franchise agreement(s) and (c) showing a good faith effort in trying secure and open your next scheduled studio, then following will occur:
- a) Extension with Release (6 months). Per written notice to us and execution of a general release in our favor, we will grant you a one-time, six-month extension to your development schedule with no Delayed Opening Fee. This six-month extension can only be used once during your development agreement and delays all subsequent development dates by 6 months. Pursuant to COMAR 02.02.08.16L, the general release required as a condition of sale, or transfer, shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- b) Delayed Opening Fee Assessed (for up to 12 months). For each month you are behind on your Development Schedule (Extension with Release excluded), you will be charged a Delayed Opening Fee of $500 for each te
Source: Item 12 — TERRITORY (FDD pages 40–44)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a Deka Lash area developer can request a one-time, six-month extension to their development schedule if they are current on their obligations to Deka Lash, in compliance with their franchise agreements, and showing a good faith effort to secure and open their next scheduled studio. To obtain this extension, the area developer must provide written notice to Deka Lash and execute a general release in Deka Lash's favor.
The key impact of using this six-month extension is that it delays all subsequent development dates by six months. This means that the deadlines for opening any remaining Deka Lash studios in the development schedule will be pushed back by six months. This extension can only be used once during the term of the area development agreement.
It's important to note that if a Deka Lash area developer fails to meet their development schedule and doesn't qualify for the six-month extension, they may be charged a Delayed Opening Fee of $500 for each territory when that territory is due. This fee can be paid for up to 12 months, with each month of payment extending the development schedule by one month for each unit right. However, failure to pay the delayed opening fee or paying it for more than 12 months can result in the loss of protected territory rights.