How long does a Deka Lash franchisee have to discharge a levy of execution upon the franchise?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- (h) The franchised business or business premises of the franchise are seized, taken over, or foreclosed by a government official in the exercise of his or her duties, or seized, taken over, or foreclosed by a creditor, lienholder, or lessor, provided that a final judgment against the franchisee remains unsatisfied for 30 days (unless a supersedeas or other appeal bond has been filed); or a levy of execution has been made upon the license granted by the franchise agreement or upon any property used in the franchised business, and it is not discharged within five days of such levy;
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, a franchisee has five days to discharge a levy of execution upon the license granted by the franchise agreement or upon any property used in the franchised business. If the franchisee fails to discharge the levy within this five-day period, it constitutes grounds for termination of the franchise agreement.
This provision protects Deka Lash from potential disruptions to the brand and business operations that could arise from a franchisee's financial instability or legal issues. A levy of execution indicates that a creditor has obtained a court order to seize a franchisee's assets to satisfy a debt. Allowing such a situation to persist could damage the reputation of the Deka Lash brand and negatively impact other franchisees.
For a prospective Deka Lash franchisee, this clause underscores the importance of maintaining sound financial management and complying with all legal obligations. Franchisees should be aware that failure to promptly address financial or legal issues that lead to a levy of execution could result in the termination of their franchise agreement. This highlights the need for franchisees to have contingency plans in place to handle unexpected financial challenges and to seek legal counsel when necessary to protect their business interests.
This type of clause is relatively standard in franchise agreements across various industries, as franchisors typically want to ensure that franchisees are financially stable and compliant with the law to protect the overall brand and system. The short cure period (five days) emphasizes the urgency with which a Deka Lash franchisee must address such a serious legal and financial event.