What is the range of the Area Development Fee for a Deka Lash franchise, and how is it explained in the FDD?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
TABLE 2 YOUR ESTIMATED INITIAL INVESTMENT AREA DEVELOPMENT AGREEMENT
| Fee (Note 1) | Estimated | Estimated | Method of | When Due | To Whom |
|---|---|---|---|---|---|
| Amount Low | Amount High | Payment | Payment is to be Made | ||
| Area Development Fee (Note 2) | $97,900 | $334,900 | Wire / ACH | Upon entering into Area Development Agreement | Us |
| Initial Investment for | $226,000 | $389,450 | See Chart above. | ||
| Your Initial Franchised | |||||
| Business (Note 3) | |||||
| TOTAL (Note 4) | $323,900 | $724,350 |
Table 2 Notes
Note 1 – Fee. The estimates set forth in Table 2 assume that you will be entering into an Area Development Agreement for the right to open and operate two (low amount) to ten (high amount) Franchised Businesses within a Development Area and the cost of opening the first Franchised Business.
Note 2 – Area Development Fee.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–27)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Area Development Fee ranges from $97,900 to $334,900. This fee allows a franchisee to secure the rights to open and operate between two and ten Deka Lash Franchised Businesses within a specific Development Area. The Area Development Agreement also covers the cost of opening the first Franchised Business.
The Area Development Fee is payable via wire or ACH transfer upon entering into the Area Development Agreement with Deka Lash. This fee is in addition to the costs associated with opening subsequent locations beyond the first studio, meaning franchisees should anticipate further expenses for each additional Deka Lash studio they plan to launch within their designated territory.
Prospective Deka Lash franchisees should carefully consider the number of territories they wish to secure upfront, as this decision directly impacts the initial investment through the Area Development Fee. While securing more territories may seem advantageous, it's crucial to assess one's financial capacity and operational capabilities to successfully develop and manage multiple Deka Lash locations. It is important to note that the total initial investment for an Area Development Agreement, including the development fee and the costs to open the first studio, ranges from $323,900 to $724,350.