What are the restrictions on advertising for a Deka Lash franchise (Item 8) and how do these relate to the franchisee's ability to develop and implement local marketing strategies (implied from obligations in Item 9)?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Franchisee's Obligations | Section In Franchise Agreement | Section in Area Development Agreement | Item in Disclosure document |
|---|---|---|---|
| a. Site selection and acquisition/lease | 3, 6.2 | 1, Appendix 1 | 11 |
| b. Pre-opening purchases/leases | 6.10, 6.11, 6.12 | Not Applicable | 7, 8 |
| c. Site development and other pre- | 6.2 | Not Applicable | 11 |
| opening requirements | |||
| d. Initial and ongoing training | 5.7, 6.1, 6.7 | Not Applicable | 11 |
| e. Opening | 6.3 | 5 | 11 |
| f. Fees | 4, 15, 19.11 | 2 | 5, 6, 7, 11 |
| g. Compliance with standards and policies/Manual | 6.4 | Not Applicable | 8, 11 |
| h. Trademarks and proprietary information | 7, 8 | Not Applicable | 13, 14 |
| i. Restrictions on products/services offered | 6.5 | Not Applicable | 8, 16 |
| j. Warranty and customer service requirements | 6.6 | Not Applicable | 6 |
| k. Territorial development and sales quotas | Not Applicable | 1, |
We reserve the right to form, change, dissolve or merge any Local Advertising Cooperative. (Franchise Agreement, Section 7.5).
Brand Development Fees. We require you to contribute a monthly Brand Development Fee equal to the greater of 3% of Gross Studio Sales or, after one year of being open, $500 per month. We may use the Brand Development Fund to pay for any costs incurred through third parties or our employment of personnel primarily dedicated to consumer marketing and promotion activities associated with advertising, promotional events, graphic design, photography, video production, branding, public relations, marketing, promotional materials, media, production, and any other activity we believe will benefit Deka Lash, including the creation, maintenance, optimization, and advertising of the company website or other websites, pay per click advertising, and administration of such, creating, conducting, and managing social media, creating, maintenance and promotion of appointment setting software, contests, direct mailers, promotions, and providing promotional materials to our franchisees. We may also use these fees for the support of creation and execution of all materials. We have the right to develop all media and marketing programs (internally or through outside vendors), and have the final decision on all promotions, creative concepts, and media. We may add information about franchise opportunities to advertising and activities supported by the Brand Development Fee. We do not guarantee that you will benefit from the Brand Development Fund in proportion to your contributions.
As a condition to signing the Franchise Agreement(s), we have required that you assign all of your Listings relating to the Deka Lash Franchise(s) to us upon the expiration or termination of any of the Franchise Agreements.
Franchisee agrees to update us as soon as possible of any listings adopted by Franchisee. Franchisee agrees to pay all amounts pertaining to the use of the Listings incurred by it when due. Upon expiration or termination of the Agreement for any reason, Franchisee's right of use of the Listings shall terminate. In the event of termination or expiration of the Agreement, Franchisee agrees to pay all amounts owed in connection with the Listings, including all sums owed under existing contracts for telephone directory advertising and to immediately at Franchisor's request, (i) take any other action as may be necessary to transfer the Listings and numbers to Franchisor or Franchisor's designated agent, (ii) install and maintain, at Franchisee's sole expense, an intercept message, in a form and manner acceptable to Franchisor on any or all of the Listings; (iii) disconnect the Listings; and/or (iv) cooperate with Franchisor or its designated agent in the removal or relisting of any telephone directory or directory assistance listing, Internet directory, website or advertising, whether published or online.
Franchisee agrees that Franchisor may require that all telephone numbers and telephone and internet equipment and service must be owned or provided by Franchisor or a supplier approved by Franchisor and that Franchisor has the right to require Franchisee to "port" or transfer to Franchisor or an approved call routing and tracking vendor all phone numbers associated with the Franchised Business or published in any print or online directory, advertisement, marketing or promotion associated with the Marks.
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, franchisees must adhere to specific advertising and marketing guidelines, impacting their ability to develop and implement local marketing strategies.
Deka Lash franchisees are obligated to comply with standards and policies outlined in the manuals, as referenced in Item 9. This compliance extends to advertising and marketing efforts. The franchisor also reserves the right to form, change, dissolve, or merge any Local Advertising Cooperative, giving Deka Lash significant control over advertising strategies. Franchisees are required to contribute a monthly Brand Development Fee, which is the greater of 3% of Gross Studio Sales or, after one year of being open, $500 per month. This fund is managed by Deka Lash for various marketing and promotional activities, including advertising, promotional events, graphic design, photography, video production, branding, public relations, and the maintenance of the company website. Deka Lash has the final decision on all promotions, creative concepts, and media.
While franchisees contribute to the Brand Development Fund, Deka Lash does not guarantee that franchisees will directly benefit from the fund in proportion to their contributions. The franchisor has the right to use these fees for activities that benefit the Deka Lash brand as a whole, and may also use these fees to add information about franchise opportunities to advertising and activities supported by the Brand Development Fee. Franchisees may request an annual unaudited financial statement of the Brand Development Fund.
Additionally, Deka Lash requires franchisees to assign all listings related to the Deka Lash franchise to them upon expiration or termination of the Franchise Agreement. Franchisees must update Deka Lash of any listings adopted and pay all amounts pertaining to their use. Deka Lash may also require franchisees to transfer all phone numbers associated with the franchised business to the franchisor or an approved vendor. These stipulations further define the restrictions on a franchisee's local marketing control, as Deka Lash maintains control over brand-related advertising assets and customer communication channels.