What is the process for obtaining a temporary protected radius for a proposed Deka Lash location?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
If a franchisee secures a location near your Exclusive Designated Search Area, and their associated protective radius (generally 1.5 miles) overlaps into your Exclusive Designated Search Area, you will not be able to locate a studio within the protected radius that overlaps your Exclusive Designated Search Area.
We will let you know of any existing studios that have protective radius overlapping into your Exclusive Designated Search Area prior to execution of this agreement, but we make no warranties that a franchisee will not subsequently choose a location that creates a protective radius that overlaps into the Exclusive Designated Search Area.
- 3.10 Protected Area Temporary Protection. We will not define a Franchise Location or Protected Area until you have an executed lease.
However, upon the submission of a fully executed Letter of Intent ("LOI") to us for a proposed location for the Franchised Business that we have approved, we will create a temporary protected radius around said proposed location within which we will not locate any other Franchised Business.
We will grant this protected radius for a period of up to 60 days to allow you to negotiate and finalize a lease for the proposed location.
While you may have multiple fully executed LOI's, we will only grant a protected radius around one of the proposed locations you designate.
This designation shall be made to us in writing, accompanied by the associated signed LOI, and we have up to 5 business days to accept such designation.
- 3.11 Protective Area Defined. Once the lease for the site is approved by us, fully executed, and submitted to us, we will then define the Franchise Location and associated Protected Area in Section 2 and Section 3 of the Schedule 1 to the Franchise Agreement, which will supersede the temporary protected radius noted above.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a franchisee can obtain a temporary protected radius for a proposed location by submitting a fully executed Letter of Intent (LOI) to Deka Lash for a location that Deka Lash has approved. Upon receipt of the LOI, Deka Lash will create a temporary protected radius around the proposed location, preventing the establishment of any other Deka Lash franchise within that radius. Deka Lash has up to 5 business days to accept the designation. This temporary protection is granted for up to 60 days to allow the franchisee to negotiate and finalize the lease for the proposed location. A franchisee can have multiple LOIs, but Deka Lash will only grant a protected radius around one designated location at a time. Once the lease is approved, fully executed, and submitted to Deka Lash, the Franchise Location and Protected Area will be defined in Schedule 1 of the Franchise Agreement, superseding the temporary protected radius.
This temporary protected radius is crucial for prospective franchisees as it provides a limited window of exclusivity while securing a lease. This protection helps mitigate the risk of another franchisee opening nearby during the critical negotiation phase. The standard protected area is generally a 1.5-mile radius, but Deka Lash reserves the right to vary the size of the Protected Area based on the demographics and development of each market.
It is important to note that the temporary protected radius is not automatically granted. It requires Deka Lash's approval of the proposed location and the submission of a fully executed LOI. Franchisees should ensure that the LOI is carefully drafted and that they are prepared to finalize the lease within the 60-day protection period. Failing to do so could result in the loss of the temporary protected radius and the potential for competition from other Deka Lash franchises. Also, if a franchisee secures a location near your Exclusive Designated Search Area, and their associated protective radius (generally 1.5 miles) overlaps into your Exclusive Designated Search Area, you will not be able to locate a studio within the protected radius that overlaps your Exclusive Designated Search Area.