What is the meaning of 'Protected Area' in the Deka Lash Franchise Agreement?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Protected Area.** There will be a "Protected Area" around your Franchised Business as stated in Schedule 1, Section 3. The area or population included in each Protected Area will vary. The Protected Area is generally a 1.5-mile radius. We reserve the right to vary the size of the Protected Area based on the demographics and development of each market. For example, in densely populated urban areas, the Protected Area may be smaller than a 1.5-mile radius. We may not alter your Protected Area without your consent, even if the population in your Protected Area increases.
Exclusive Territory. Your Protected Area will be an exclusive territory in which we will not establish either a company-owned or franchised outlet selling the same or similar goods or services under the same or similar trademarks or service marks within the Protected Area of your Franchised Business.
Not Exclusive for Marketing. Because marketing efforts are difficult to limit to a specific area (for example, radio and internet do not follow geographic boundaries), your territory is not exclusive for marketing.
Source: Item 12 — TERRITORY (FDD pages 40–44)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a "Protected Area" is established around a franchisee's business location as outlined in Schedule 1, Section 3 of the Franchise Agreement. While the size may vary based on demographics and market development, it is generally a 1.5-mile radius. Deka Lash retains the right to adjust the size of the Protected Area based on market conditions but will not alter it without the franchisee's consent, even if the population increases.
Within this Protected Area, Deka Lash grants the franchisee an exclusive territory, promising not to establish another company-owned or franchised outlet selling similar goods or services under the same trademarks. However, this exclusivity does not extend to marketing efforts, as marketing activities like radio and internet advertising are difficult to confine geographically. Deka Lash and its affiliates retain specific rights within the Protected Area, including selling approved products and services through alternative channels like the internet, acquiring or being acquired by competing systems, developing other business systems under different names or marks, and engaging in activities not expressly prohibited in the Franchise Agreement.
It's important to note that Deka Lash does not grant franchisees rights to distribute products through alternative channels or share in proceeds from sales through these channels. The agreement also specifies that Deka Lash can establish policies regarding gift certificates, gift cards, memberships, discounts, coupons, or promotions, including allocation of funds when a gift certificate is redeemed at a different studio than where it was purchased. Franchisees must operate their Deka Lash studio only at the approved location and cannot relocate without approval.
Prospective franchisees should be aware that Deka Lash may terminate the Franchise Agreement if the franchisee fails to meet certain sales volume requirements, specifically a minimum Gross Revenue of $15,000 per month or a minimum of 75 members in the membership program, after two years from the Effective Date of the Franchise Agreement. Additionally, the franchisee's advertising efforts must primarily focus on their territory unless otherwise agreed upon in writing with Deka Lash.