What is the maximum frequency with which Deka Lash can change the 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, the Technology Fee can be changed once per calendar year, provided Deka Lash gives franchisees 30 days' notice. The monthly Technology Fee is $199 from the date of signing the franchise agreement through the studio's opening, and $399 per month thereafter.
The ability to increase fees is a fairly standard practice in franchising, allowing the franchisor to adapt to changing market conditions or increased costs. However, the Deka Lash franchise agreement stipulates that any increase to the Technology Fee would be limited to covering the costs of additional software made available to franchisees. This provides some assurance that fee increases will correlate with tangible benefits.
For a prospective Deka Lash franchisee, this means that the Technology Fee could potentially increase annually, but those increases should be tied to new software offerings. It would be prudent to inquire about the specific types of software that Deka Lash anticipates adding and how those additions will benefit franchisees. Understanding the potential for fee increases and their justification is an important part of assessing the overall cost and value of the Deka Lash franchise.