What is the purpose of allowing Deka Lash to increase the Technology Fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty (Notes 1 and 2) | 6% of Gross Studio Sales or $600 per month, whichever is greater. After your 1 st year of operations, the minimum Royalty Fee increases to $1,000 per month. | As specified in the operations manual. Currently we collect royalties twice a month on the 5 th day following the end of each semi-monthly period. | |
| Brand | The greater of 3% of Gross Studio Sales or, after the 1 st year of operations, $500 per month. | As specified in the operations manual. Currently we collect royalties twice a month on the 5 th day following the end of each semi-monthly period. | You are required to contribute the specified Brand Development Fee into the Brand Development Fund (the "Brand Fund"). We are not obligated to maintain the Brand Fund in a separate bank account nor use the entirety of amounts collected within the same calendar year. However, we will account for collections and expenditures and track the Brand Fund balance separately. |
| Development | |||
| Fee | |||
| Technology Fee | $199 per month per executed franchise agreement from date of signing franchise agreement through the date of opening of the studio. $399 per month per franchise location thereafter. | 5 th day of the month for the preceding month, or as specified in the operations manual. | If deemed necessary, we can change monthly fee once a calendar year with 30 days' notice. Any increase would be limited to cover costs of additional software made ava |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Technology Fee is initially $199 per month from the franchise agreement signing until the studio opens, then increases to $399 per month per location. Deka Lash retains the right to increase this monthly fee once per calendar year, providing 30 days' notice.
The stated purpose for allowing Deka Lash to increase the Technology Fee is specifically to cover the costs of additional software made available to franchisees. This suggests that the fee is directly tied to the technology resources and support provided to franchisees, and any increases would correspond to enhancements or additions to those resources.
For a prospective franchisee, this means the Technology Fee could fluctuate, but Deka Lash is supposed to limit increases to covering the costs of new software. It would be prudent for a potential Deka Lash franchisee to inquire about the specific types of software covered by this fee and the process by which new software and associated cost increases are evaluated and implemented.