Does Deka Lash have an obligation to conduct advertising for my franchised business?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
rs.** We may elect to offer and you may elect to attend additional training or seminars. (Franchise Agreement, Section 5.7).
Advertising Program:
Our Obligation to Conduct Advertising. We advise you in the advertising, marketing, and promotion of your Franchised Business, to the extent we deem necessary. We may, from time to time, at our sole discretion, produce advertising material and conduct promotional programs. We may use online, radio, television, direct mail, billboards, print or other advertising. We may use local, regional, or national advertising. We may produce advertising material in-house or through outside agencies. (Franchise Agreement, Section 5.8).
Use of Your Own Advertising Material. You may use your own advertising materials provided that, prior to use, you submit them to us and we approve them, in writing, and they adhere to federal, state, and local law. All Internet and social media marketing using our Marks must be coordinated through us and approved by us. If our written approval is not received within 14 days from the date we received any material or marketing request, the material or request is deemed disapproved. (Franchise Agreement, Section 7.2).
Local Advertising Cooperative. We may designate any geographic area as a region for establishing a local advertising cooperative ("Local Advertising Cooperative"), though we typically designate areas based on Designated Market Areas as determined by the A.C. Nielsen Company. The members of the Local Advertising Cooperative for any area will consist of all Franchised Businesses, as well as outlets operated by us or our affiliates. We will determine in advance how each Local Advertising Cooperative will be organized and governed and when it must start operation. Each Local Advertising Cooperative will be organized for the sole purpose of administering advertising programs and developing, subject to our approval, promotional materials for use by the members in local advertising. If a Local Advertising Cooperative has been established for a geographic area where your Franchised Business is located when the Franchise Agreement is signed, or if any Local Advertising Cooperative is established during the term of the Franchise Agreement, you must become a member of the Local Advertising Cooperative and abide by the rules of the Local Advertising Cooperative.
If we establish a Local Advertising Cooperative for your area, you and franchisor-owned outlets in the Cooperative must contribute to the Local Advertising Cooperative the amounts required by its members, and all outlets must contribute on the same basis (which may be a uniform percent of revenue, a fixed amount, etc.). The amount of contribution will be determined by the members of the Local Advertising Cooperative, subject to our approval. Each member will have one vote for each Franchised Business operated by the member within the geographic area subject to the Local Advertising Cooperative.
Any contributions you make towards the Cooperative will be credited against your Local Marketing Requirement.
We reserve the right to form, change, dissolve or merge any Local Advertising Cooperative. (Franchise Agreement, Section 7.5).
Brand Development Fees. We require you to contribute a monthly Brand Development Fee equal to the greater of 3% of Gross Studio Sales or, after one year of being open, $500 per month.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 32–40)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, Deka Lash is not obligated to conduct advertising for your franchised business. Deka Lash advises franchisees in advertising, marketing, and promotion to the extent they deem necessary. Deka Lash may, from time to time, at its sole discretion, produce advertising material and conduct promotional programs using online, radio, television, direct mail, billboards, print, or other advertising. This advertising may be local, regional, or national, and Deka Lash may produce advertising material in-house or through outside agencies.
As a Deka Lash franchisee, you are allowed to use your own advertising materials, but you must submit them to Deka Lash for written approval before use, ensuring they comply with federal, state, and local laws. All Internet and social media marketing using Deka Lash's trademarks must be coordinated through and approved by Deka Lash. If written approval is not received within 14 days of Deka Lash receiving the material or marketing request, it is considered disapproved.
Deka Lash requires franchisees to contribute to a Brand Development Fund. Franchisees must contribute a monthly Brand Development Fee equal to the greater of 3% of Gross Studio Sales or, after one year of being open, $500 per month. Deka Lash may use the Brand Development Fund for various consumer marketing and promotion activities, including advertising, promotional events, graphic design, photography, video production, branding, public relations, marketing, promotional materials, media, and website maintenance. Deka Lash has the right to develop all media and marketing programs and has the final decision on all promotions, creative concepts, and media. Deka Lash does not guarantee that franchisees will benefit from the Brand Development Fund in proportion to their contributions.
As a Deka Lash franchisee, you are required to spend $2,000 per month on local marketing and promotion in accordance with Deka Lash's standards and specifications. Deka Lash may create, operate, and promote websites, social media accounts, digital advertising, or other means of digital marketing to promote the brand, studios, trademarks, and franchise opportunities. Unless Deka Lash consents in writing, franchisees may not conduct any digital marketing that uses Deka Lash's marks or relates to their studio, including through an independent website or social media account. Deka Lash may withdraw approval at any time, and franchisees must immediately modify or delete any digital marketing as required.