What is the purpose of the Deka Lash Brand Development Fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
g)
ITEM 6 OTHER FEES
| 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. |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Brand Development Fee is a contribution to the Brand Development Fund, also referred to as the "Brand Fund." Franchisees are required to pay this fee. The amount is either 3% of Gross Studio Sales or, after the 1st year of operations, $500 per month, whichever is greater.
The Brand Development Fund is used to promote the Deka Lash brand. While Deka Lash is not obligated to keep the Brand Fund in a separate bank account or spend all of the collected funds within the same calendar year, they will account for collections and expenditures and track the Brand Fund balance separately.
This means that as a Deka Lash franchisee, you will be required to contribute to the Brand Fund, which Deka Lash uses for marketing and advertising efforts to enhance the brand's recognition and attract customers. The fee ensures there are sufficient funds available for marketing initiatives. The fact that Deka Lash tracks the Brand Fund balance separately provides some transparency, though franchisees should inquire about the specific uses of the fund and how it benefits their individual locations.