What is the meaning of 'Exclusive Designated Search Area' in the Deka Lash Franchise Agreement?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Non-Exclusive Designated Search Area. Unless specified otherwise, we will provide you with a non-exclusive "Designated Search Area" as defined in Section 1 of Schedule 1 of your Franchise Agreement within which you must locate your Franchised Business.
Exclusive Designated Search Area. If your Designated Search Area contains exclusive rights, such as being part of an Area Development Agreement, we will not license anyone the right to open or operate a Franchised Business that is physically located within that Exclusive Designated Search Area. This does not mean you can open or operate a Franchised Business anywhere within that Exclusive Designated Search Area. If a franchisee secures a location near your Exclusive Designated Search Area, and their associated protective radius (generally 1.5 miles) overlaps into your Exclusive Designated Search Area, you will not be able to locate a studio within the protected radius that overlaps your Exclusive Designated Search Area. We will let you know of any existing studios that have protective radius overlapping into your Exclusive Designated Search Area prior to execution of this agreement, but we make no warranties that a franchisee
Source: Item 12 — TERRITORY (FDD pages 40–44)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a 'Designated Search Area' is a non-exclusive area provided to the franchisee where they must locate their Franchised Business. However, if the Designated Search Area contains exclusive rights, such as being part of an Area Development Agreement, it becomes an 'Exclusive Designated Search Area'. In this case, Deka Lash will not license anyone else the right to open or operate a Franchised Business physically located within that Exclusive Designated Search Area.
Even with an Exclusive Designated Search Area, a Deka Lash franchisee cannot simply open a franchise anywhere within that area. If another franchisee secures a location nearby, and their protected radius (typically 1.5 miles) overlaps into the Exclusive Designated Search Area, the new franchisee will not be able to locate their studio within the overlapping protected radius.
Prior to the execution of the franchise agreement, Deka Lash will inform the franchisee of any existing studios with protective radiuses that overlap into their Exclusive Designated Search Area. However, Deka Lash does not guarantee that a franchisee will not later choose a location that results in an overlapping protective radius. This means that while the Exclusive Designated Search Area provides some level of location exclusivity, it is subject to change based on the actions of other franchisees and their protected radius.