factual

How is the purchase price determined for furniture, equipment, signage, fixtures, and supplies that Deka Lash may purchase from a terminated franchisee?

Deka_Lash Franchise · 2024 FDD

Answer from 2024 FDD Document

If this Agreement expires, is not renewed, or is terminated for any reason by any party, including a sale of the Franchised Business, you must immediately:

  • Stop identifying yourself as a franchisee of ours and discontinue using any of our Marks or any marks which are likely to be confused with our Marks;
  • b) Deliver to us the original and all copies, both paper and electronic, of the business records of your Franchised Business (retaining only such copies as you need for legal or tax purposes);
  • c) Pay to us all amounts owing to us;
  • d) At our request, cancel or assign to us all telephone numbers used in the Franchised Business:
  • e) Reimburse customers for any fees paid for services not yet rendered or reimburse other Franchised Businesses or us for performing such services you received payment for in advance;
  • f) At our option, and upon our request, use your best efforts to assist in our taking over the lease of the location of your Franchised Business, whether it be through a new lease or assignment;
  • g) We consider all of the studio design, layout, color patterns, furniture, fixtures and equipment as intellectual proprietary and proprietary to our system. As such, at our option, you will offer to us the right to purchase from you any or part of the furniture, equipment, signage, fixtures, and supplies within 30 days of the date of termination for the adjusted book value, which is the undepreciated book value of the assets on your most recently filed federal tax return prior to the date of the termination or expiration. If we elect not to purchase any or part of the furniture, equipment, signage, fixtures, and supplies, you agree to either sell such furniture, equipment, signage, fixtures, and supplies to a current franchisee of ours, or destroy the furniture, equipment, signage, fixtures, and supplies such that they cannot be re-used;

Source: Item 23 — RECEIPT (FDD pages 63–234)

What This Means (2024 FDD)

According to Deka Lash's 2024 Franchise Disclosure Document, if the Franchise Agreement expires, isn't renewed, or is terminated for any reason, Deka Lash has the option to purchase the franchisee's furniture, equipment, signage, fixtures, and supplies.

The purchase price will be based on the adjusted book value of these items. Adjusted book value is defined as the undepreciated book value of the assets as reported on the franchisee's most recently filed federal tax return before the termination or expiration date.

If Deka Lash chooses not to purchase these items, the franchisee is obligated to either sell them to another current Deka Lash franchisee or destroy them to prevent their reuse. This ensures that the brand's standards are maintained even after a franchise ceases operation.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.