When does the minimum Deka Lash Royalty Fee increase to $1,000 per month?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
g)
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 |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the minimum royalty fee increases to $1,000 per month after the first year of operations. Initially, the royalty fee is 6% of Gross Studio Sales or $600 per month, whichever is greater.
This increase in the minimum royalty fee means that after the first year, a Deka Lash franchisee must pay at least $1,000 per month in royalties, regardless of their Gross Studio Sales. If 6% of their Gross Studio Sales exceeds $1,000, they will pay the higher amount. This change could significantly impact the franchisee's profitability, especially if the studio's sales are initially low.
Prospective franchisees should carefully consider this increase when projecting their potential earnings and expenses. It is important to develop a business plan that accounts for this higher minimum royalty fee and ensures that the studio can generate sufficient revenue to cover it. Franchisees should also be aware that Deka Lash collects royalties twice a month on the 5th day following the end of each semi-monthly period, as specified in the operations manual.