How long must royalties be paid for a Deka Lash franchise agreement?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
e (12) months after you execute this Agreement, regardless of when you actually open. If this agreement is signed as the second or subsequent unit in an Area Development Agreement, royalties begin the date you sell your first paid product, service, or membership ("Location Start Date").
- b) Royalty Amount. From the time of your Royalty Start Date until the end of the term of this agreement, you will pay to us as a Royalty Fee equal to the greater of: (i) 6% of all Gross Revenue; or (ii) $600 per month.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, royalties must be paid for the entire term of the Franchise Agreement.
Specifically, the FDD states that from the royalty start date until the end of the agreement's term, the franchisee will pay a royalty fee. This fee is the greater of 6% of all gross revenue or a specified minimum monthly amount. For the first unit, royalties begin twelve months after the agreement is signed, regardless of when the studio actually opens. If the agreement is for a second or subsequent unit under an Area Development Agreement, royalties start when the first paid product, service, or membership is sold.
After the second year of operations, the minimum royalty fee increases. The franchisee is obligated to continue paying royalties throughout the entire term of the Franchise Agreement, unless Deka Lash agrees otherwise in writing. This ongoing royalty payment is a standard practice in franchising, compensating the franchisor for the continued use of their brand, systems, and support.