Can the Royalty Fees for a renewed Deka Lash franchise be different from the original agreement?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
ot intend to renew. You may be asked to sign a contract with materially different terms and conditions than your original contract.
- f. Pay the renewal fee of $3,500.
- q. Successfully complete any retraining program we require at your expense.
- 2.3 Renewal Acknowledgements. Under a Renewal of Franchise, you acknowledge that:
- a. Royalty Fees, Brand Development Fund Fees, and other fees will be set under the thencurrent Franchise Agreement and may vary materially from the terms of this Agreement.
- b. We may refuse to renew this Agreement if you fail to satisfactorily comply with this Agreement. The determination of satisfactory compliance will be within our exclusive discretion in good faith.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the royalty fees for a renewed franchise can indeed be different from the original agreement. Specifically, the document states that under a renewal of the franchise agreement, royalty fees will be set under the then-current franchise agreement. This agreement in place at the time of renewal may vary materially from the terms of the original contract.
This means that a franchisee should anticipate potential changes in the financial obligations when considering renewal. The new royalty fee structure could be higher or lower than what they were initially paying. It is important for franchisees to carefully review the terms of the then-current franchise agreement before deciding to renew their Deka Lash franchise.
In addition to royalty fees, the Brand Development Fund Fees and other fees are also subject to change under the then-current franchise agreement at the time of renewal. The document also states that Deka Lash may refuse to renew the agreement if the franchisee fails to satisfactorily comply with the existing agreement, with the determination of satisfactory compliance being at Deka Lash's exclusive discretion in good faith. The franchisee must also pay a renewal fee of $3,500.