What are the potential liabilities upon default of a Deka Lash financed loan?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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, if a franchisee defaults on a loan financed by Deka Lash, several liabilities may arise. These liabilities include the termination of the Franchise Agreement. Additionally, the franchisee is responsible for paying the entire outstanding loan amount.
Furthermore, the franchisee is liable for Deka Lash's attorney fees and court costs incurred while collecting the debt. This means that in addition to the principal loan amount, interest, and any late fees, the franchisee must also cover the legal expenses Deka Lash incurs to recover the debt.
In addition to the financial liabilities, the franchisee also waives certain legal rights upon default. These waivers include the right to a jury trial, homestead and other exemptions, and the right to presentment, demand, protest, and notice of dishonor. These waivers limit the franchisee's ability to defend against Deka Lash's collection efforts in court.