What is the length of the one-time extension to the development schedule offered by Deka Lash?
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, area developers may be granted a one-time, six-month extension to their development schedule under specific conditions. This extension is offered without a Delayed Opening Fee, providing some flexibility if the developer faces challenges in meeting their initial obligations. This six-month extension can only be used once during the development agreement and delays all subsequent development dates by 6 months. To qualify for this extension, the area developer must be current on all obligations to Deka Lash, in compliance with all franchise agreements, and demonstrate a good faith effort to secure and open the next scheduled studio.
To obtain the extension, the area developer must provide written notice to Deka Lash and execute a general release in the franchisor's favor. This release is a legal document that typically waives certain rights or claims the franchisee may have against the franchisor. The FDD specifically notes that 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.
If an area developer needs more time beyond the one-time six-month extension, Deka Lash offers another option: paying a Delayed Opening Fee. For each month the developer is behind schedule (excluding the six-month extension), a fee of $500 is charged for each territory when that territory is due. This fee extends the development schedule by one month for each unit right, and developers can pay this fee for up to 12 months. However, failing to pay the delayed opening fee, stopping payments, or reaching the 12-month limit results in the loss of protected territory rights and transferability rights.