What rights does the developer of Deka Lash have within the Development Area upon expiration or termination of the Development Agreement?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
rged the delayed opening fees, or (d) after a period of 12 months of paying the delayed opening fee, you will immediately lose your protected territory rights.
If at any point, you are (a) not current on your obligations owed to us, (b) not in compliance with your Franchise Agreement(s) or Development Agreement, or (c) not showing a good faith effort in trying secure and open your next scheduled studio, your territory and remaining development rights will be immediately terminated.
Deka Lash reserves the right to revise the above options at any time.
6. TERM AND TERMINATION
- 6.1 Term. This Agreement will commence as of the date it is fully executed and, unless earlier terminated by us, will end on the earlier of a) the last day of the calendar month that the final Franchised Business is required to be opened and operating under the Development Schedule or b) the date you execute a lease for the final Franchised Business required to be opened and operating under the Development Schedule. Upon expiration or termination of this Agreement for any reason, you will not have any rights within the Development Area other than the territorial rights granted in the franchise agreement executed in connection with any Franchised Businesses that you have opened and commenced operating as of the date this Agreement is terminated or expires.
- 6.2 Termination. Any material violation or breach of any Franchise Agreement or this Agreement will be deemed a material violation of this Agreement and any and all Franchise Agreements between the parties.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, upon the expiration or termination of the Development Agreement, the developer retains only the territorial rights granted in the franchise agreements for the Deka Lash Franchised Businesses that they have already opened and are operating. This means the developer's rights within the Development Area are limited to the locations they've already established.
Specifically, Deka Lash has the right to establish or license others to establish Deka Lash units within the previously reserved Development Area without any restrictions. The developer's right to open and operate any remaining franchises that have not yet opened for business in the Development Area is revoked and terminated.
In practical terms, a developer losing their development rights would be unable to expand further within the designated area, losing the opportunity to capitalize on potential market growth. Their focus would then be limited to maintaining and operating the existing Deka Lash franchises they had successfully launched before the termination or expiration of the agreement.