What is the limitation on any increase to the Deka Lash Technology Fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty (Notes 1 and 2) | 6% of Gross Studio Sales or $600 per month, whichever is greater. After your 1 st year of operations, the minimum Royalty Fee increases to $1,000 per month. | As specified in the operations manual. Currently we collect royalties twice a month on the 5 th day following the end of each semi-monthly period. | |
| Brand | The greater of 3% of Gross Studio Sales or, after the 1 st year of operations, $500 per month. | As specified in the operations manual. Currently we collect royalties twice a month on the 5 th day following the end of each semi-monthly period. | You are required to contribute the specified Brand Development Fee into the Brand Development Fund (the "Brand Fund"). We are not obligated to maintain the Brand Fund in a separate bank account nor use the entirety of amounts collected within the same calendar year. However, we will account for collections and expenditures and track the Brand Fund balance separately. |
| Development | |||
| Fee | |||
| Technology Fee | $199 per month per executed franchise agreement from date of signing franchise agreement through the date of opening of the studio. $399 per month per franchise location thereafter. | 5 th day of the month for the preceding month, or as specified in the operations manual. | If deemed necessary, we can change monthly fee once a calendar year with 30 days' notice. Any increase would be limited to cover costs of additional software made ava |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, Deka Lash can change the monthly Technology Fee once per calendar year, providing 30 days' notice. Any increase to the Technology Fee is limited to covering the costs of additional software made available to franchisees.
The Technology Fee is $199 per month per executed franchise agreement from the date of signing until the studio opens. After the studio opens, the Technology Fee increases to $399 per month per franchise location. This fee is due on the 5th day of the month for the preceding month, or as specified in the operations manual.
This means that while Deka Lash can increase the Technology Fee, it cannot do so arbitrarily. The increase must be justified by the addition of new software that benefits the franchisees. This provides some protection to franchisees against unexpected or excessive fee hikes. Prospective franchisees should inquire about the current software included in the Technology Fee and any planned software additions that could lead to future fee increases.