What is the minimum Deka Lash Brand Development Fee after the first year of operations?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
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ITEM 6 OTHER FEES
| 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. |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Brand Development Fee is the greater of 3% of Gross Studio Sales or, after the 1st year of operations, $500 per month. This fee contributes to the Brand Development Fund, which Deka Lash uses for marketing and promotion.
For a prospective franchisee, this means that after the first year, they will pay a minimum of $500 per month for the Brand Development Fee, regardless of their gross sales. If 3% of their Gross Studio Sales exceeds $500 in any given month, they will pay the higher amount. This fee is collected twice a month, aligning with the royalty collection schedule.
It's important to note that Deka Lash is not obligated to maintain the Brand Fund in a separate bank account or use all collected amounts within the same calendar year. However, they will account for collections and expenditures and track the Brand Fund balance separately. This provides some transparency, but franchisees should be aware that the funds may be used at the discretion of Deka Lash.