What is the maximum duration for which a Deka Lash franchisee can be charged an opening deadline extension fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Transfer Fee | $10,000 (complete transfer or transfer or transfer of a majority interest) per transaction. Selling franchisee is responsible for all applicable broker fees. | At the time you transfer the franchise or a majority ownership in it. | Transferee must be approved by us and you must be in compliance with your Franchise Agreement. No fee if transferred from individual to business entity owned by the same owners with the same ownership percentages. If deemed necessary, we can revise the transfer fee once a calendar year with a 30 days' |
| Audit Fee | Cost of the audit plus any shortfall amount found to be due. | On demand. | notice. Payable if audit discloses an underpayment of royalty or fee by 2% of more. |
| Opening Deadline Extension Fee | $500 per month (or portion of month) for which the deadline is extended. | Automatically begins on the first date of default, unless a lease is executed. | Payable for each month that you are granted an extension beyond the 365 days allowed in your franchise agreement, for up to 12 months. |
| Development | $500 per month per territory according to each territory's development deadline. | At time of extension to development schedule. | 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 the delayed opening fee, you will immediately lose your protected territory rights and all accompanying transferability rights therein. |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a franchisee may be charged an opening deadline extension fee for a maximum of 12 months. This fee is $500 per month (or portion thereof) and is applied if the franchisee is granted an extension beyond the initial 365 days allowed in the franchise agreement.
This extension fee becomes payable automatically from the first date of default, unless a lease is executed. However, the franchisee's protected territory rights and transferability rights are immediately forfeited if they (a) fail to pay the delayed opening fee, (b) stop or refute Deka Lash's ability to ACH the transaction, (c) notify Deka Lash in writing that they no longer want to be charged the delayed opening fees, or (d) continue paying the delayed opening fee for 12 months.
In practical terms, this means a Deka Lash franchisee who is struggling to open their studio within the initial timeframe has the option to extend the deadline by paying an additional fee. However, this extension is limited to a year, and continued delays beyond this period will not be accommodated. Franchisees should carefully consider their financial and operational readiness to avoid incurring these fees and potentially losing their protected territory rights.