Where are the Royalty and Brand Development Fees for a Deka Lash franchise specified?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
on-Refundable Training Fee**. Additionally, you must pay to us at the same time as the Initial Franchise Fee, a Non-Refundable Training Fee of $3,750. The Training Fee is non-refundable and non-transferable except to an entity owned by the same owners with the same ownership percentages.
4.6 Royalty.
- a) Royalty Start Date. For your first unit, royalties begin twelve (12) months after you execute this Agreement, regardless of when you actually open. If this agreement is signed as the second or subsequent unit in an Area Development Agreement, royalties begin the date you sell your first paid product, service, or membership ("Location Start Date").
- b) Royalty Amount. From the time of your Royalty Start Date until the end of the term of this agreement, you will pay to us as a Royalty Fee equal to the greater of: (i) 6% of all Gross Revenue; or (ii) $600 per month. After your second year of operations, the minimum Royalty Fee increases to the greater of: (i) 6% of all Gross Revenue; or (ii) $1,000 per month.
- c) Payment Dates. As specified in the Operations Manual.
- d) Lifetime of Franchise Agreement. Royalties must be paid for the term of t
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, Item 4.6 and 4.7 outline the Royalty and Brand Development Fees. For the Royalty Fee, starting twelve months after the agreement is executed for the first unit, franchisees must pay the greater of 6% of all Gross Revenue or $600 per month. After the second year of operations, the minimum Royalty Fee increases to the greater of 6% of all Gross Revenue or $1,000 per month.
For the Brand Development Fee, Deka Lash franchisees must pay the greater of 3% of Gross Studio Sales or, after being open for one year, $500 per month for the Brand Development Fund. The payment frequency for both the Royalty and Brand Development Fee will be specified in the Operations Manual.
These ongoing fees are standard in franchising, as they provide Deka Lash with the revenue to support the brand and provide ongoing services to franchisees. Franchisees should carefully consider these costs when evaluating the potential profitability of a Deka Lash franchise.