For how many months will Deka Lash allow a developer to pay a Delayed Opening Fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
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 territory when that territory is due. This Development Schedule Extension Fee must be paid to us with our then-current royalty collections process. For each month this is paid, your development schedule for each of
- those unit rights will be extended by one month. We will allow you to pay a Delayed Opening Fee for up to 12 months.
- c) Loss of Protected Territory and Transferability. If at any point you (a) do not pay your delayed opening fee, (b) stop or refute our ability to ACH this transaction, (c) notify us, in writing, that you no longer want to be charged the delayed opening fees, or (d) after a period of 12 months of paying t
Source: Item 12 — TERRITORY (FDD pages 40–44)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, an area developer can pay a Delayed Opening Fee for up to 12 months. This fee applies if the developer is behind on their development schedule, excluding any extension granted with a release. For each month the developer is behind, they will be charged $500 for each territory due, and paying this fee extends the development schedule for each unit right by one month.
However, this option is contingent on the developer remaining current on their obligations to Deka Lash, complying with their franchise and development agreements, and demonstrating a good faith effort to secure and open their next scheduled studio. If these conditions are not met, the developer may not be eligible to pay the Delayed Opening Fee.
It's important to note that Deka Lash outlines specific circumstances that would lead to the loss of protected territory rights and transferability rights. These include not paying the delayed opening fee, stopping or refuting the ability to ACH the transaction, notifying Deka Lash in writing that they no longer want to be charged the delayed opening fees, or paying the delayed opening fee for 12 months. After any of these circumstances, Deka Lash retains all rights to approve the studio location(s).
This policy provides some flexibility for Deka Lash area developers facing delays, but it also imposes financial obligations and strict conditions to maintain territory rights. Prospective developers should carefully consider these factors and discuss the development schedule and potential delays with Deka Lash before entering into an agreement.