What is the minimum time a franchisee must operate before Deka Lash may offer financing?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
We do not offer direct or indirect financing until you have been a franchisee for at least 24 months. At that time, we may offer financing for the Initial Franchise Fee for any additional units.
Whether we will extend financing, and the amount, will vary depending upon the availability of funds and your creditworthiness.
The following table summarizes the financing we may offer you for the Initial Fees.
| Item Financed | Initial Franchise Fee for any additional unit rights acquired after 24 months of signing of a Franchise Agreement |
|---|---|
| Source of Financing | Us |
| Down Payment | 50% |
| Amount Financed | 50% |
| Interest Rate | 10% Annual Percentage Rate (A.P.R.) |
| Period of Repayment | 60 months |
| Monthly Payment | $ 404 per month on a $19,000 loan |
| Security Required | Personal Guaranty |
| Whether a Person Other than the Franchisee Must Personally Guarantee the Debt | If the franchisee is an entity, the owners of the franchisee entity must personally guarantee the debt |
| Prepayment Penalty | None |
| Liability Upon Default | Termination of Franchise Agreement; you must pay entire amount due, our attorney fees, and court costs in collecting debt. |
| Waiver of Defenses or Other Legal Right on Default | Waiver of right to jury trial; homestead and other exemptions; waiver of presentment, demand, protest, notice of dishonor. |
Source: Item 10 — FINANCING (FDD pages 31–32)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a franchisee must operate for at least 24 months before Deka Lash may offer direct or indirect financing. After this period, Deka Lash may offer financing for the Initial Franchise Fee for additional units. However, the availability of financing, as well as the amount, depends on the availability of funds and the franchisee's creditworthiness.
If Deka Lash does offer financing, it will be for the Initial Franchise Fee for any additional unit rights acquired after the initial franchise agreement. The franchisee is required to make a down payment of 50%, with Deka Lash financing the remaining 50%. The interest rate is set at 10% Annual Percentage Rate (A.P.R.), and the repayment period is 60 months. For example, the monthly payment would be $404 per month on a $19,000 loan.
As security, Deka Lash requires a personal guaranty. If the franchisee is an entity, the owners of the franchisee entity must personally guarantee the debt. There is no prepayment penalty. However, upon default, the Franchise Agreement may be terminated, and the franchisee is liable for the entire amount due, including Deka Lash's attorney fees and court costs incurred in collecting the debt. The franchisee also waives the right to a jury trial, homestead and other exemptions, and waives presentment, demand, protest, and notice of dishonor.