factual

Is the Deka Lash territory exclusive for marketing purposes?

Deka_Lash Franchise · 2024 FDD

Answer from 2024 FDD Document

rotected radius noted above.

  • 3.12 Lease Length. You must sign a lease for a minimum of five (5) years with optional extension terms.
  • 3.13 Options, Rights of First Refusal. We do not grant rights of first refusal or similar rights to acquire additional franchises.
  • 3.14 Our Rights in Protected Areas. We and our affiliates also reserve the right to:
    • a. Sell approved products and services, using our principal trademarks or different trademarks, through all alternative channels of distribution as we deem appropriate, including, but not limited to, the internet, the right to run a website to advertise products and services, and sell products and services on that website under our Marks, without paying compensation to you for soliciting or accepting orders inside your territory.
    • b. Acquire, or be acquired by, any competing system or other third party, including a competing system that has one or more units located within your Protected Area and that may or may not then operate under our Marks and brand.
    • c. Develop and establish other business systems (including systems that distribute products or services similar to those offered at Deka Lash businesses) using other names or marks, and grant licenses to use those systems.

  • d. Engage and license others to engage in any other activities not expressly prohibited in the Franchise Agreement.
  • 3.15 No Rights to Alternate Channels of Distribution. You understand that the Franchise Agreement grants you no rights: (i) to distribute such products through alternative channels of distribution (such as the Internet, catalog sales, telemarketing, or other direct marketing); or (ii) to share in any of the proceeds received by any party selling through alternative channels of distribution.
  • 3.16 Acceptance & Reimbursement Policies. We reserve the right to establish policies and guidelines regarding the acceptance and reimbursement associated with gift certificates, gift cards, memberships, discounts, coupons, or promotions as set forth in our Manuals or otherwise in writing by us. For example, we reserve the right to establish policies relating to allocation of funds when a person buys a gift certificate in one studio, but it is redeemed in another studio.
  • 3.17 All Other Rights Reserved. Except as provided in this Section 3 of this Agreement, the parties agree and acknowledge that the rights granted in this Agreement are non-exclusive and that we and our affiliates reserve all other rights not expressly granted to you herein.

4. FEES AND PAYMENTS

  • 4.1 Initial Franchise Fee. The initial franchise fee is $59,900. If you purchase additional Franchised Business rights after the signing of your first Franchise Agreement with us, the initial franchise fee is $38,000 per Franchised Business provided the subsequent purchase occurs within five years of signing the first franchise agreement with us and you are current on your obligations to us. If you are acquiring an open and operating Franchised Business, the franchise fee is $19,900. If you fail to open the Franchise within the time limits expressed in the Franchise Agreement, we may terminate the Franchise Agreement and retain the entire Initial Franchise Fee. The initial franchise fee is fully earned and nonrefundable upon your signing of the franchise agreement and receipt of the funds by us.
  • 4.2 Franchise Fee Considerations. This Franchise Fee is payment, in part, for expenses incurred by Franchisor, including marketing for franchisee, referral fees and commissions, sales expenses, administrative overhead, return on investment, costs related to the execution of this Agreement, legal, accounting and other professional fees and our lost or deferred opportunity to sell Franchises in your market area to others.
  • 4.3 Operations Onboarding & First Studio Opening Support Fee. You must pay to us at the same time as the Initial Franchise Fee, an Operations Onboarding & First Studio Opening Support Fee of $5,450. This fee offsets our costs in supporting you and your operations staff through the onboarding process and supporting your efforts to find and develop your first site. The Operations Onboarding & First Studio Opening Support Fee is fully earned and non-refundable upon your signing of the Franchise Agreement and receipt of the funds by us. For your second and subsequent locations, you are not required to pay this fee.
  • 4.4 Non-Refundable Training Fee.

Source: Item 23 — RECEIPT (FDD pages 63–234)

What This Means (2024 FDD)

According to the 2024 Deka Lash Franchise Disclosure Document, a franchisee's territory is not exclusive for marketing purposes. While Deka Lash grants a protected area, generally a 1.5-mile radius, they retain significant rights to engage in marketing activities within that area.

Deka Lash and its affiliates reserve the right to sell approved products and services through alternative channels of distribution, including the internet, without compensating the franchisee for orders solicited or accepted within their territory. Additionally, Deka Lash can acquire or be acquired by competing systems, even those with units inside a franchisee's protected area. They can also develop other business systems, even those similar to Deka Lash, under different names or marks.

Furthermore, the franchisee has no rights to proceeds from sales through alternative channels and must not conduct digital marketing related to the Deka Lash brand without written consent from Deka Lash. Deka Lash also has the right to offer deals and discounted services on third-party websites and retain the revenue, contributing any net gain to the Brand Development Fund. These stipulations mean that Deka Lash retains control over marketing strategies and channels, which may impact a franchisee's ability to independently market their studio within their protected area.

These terms highlight that while a franchisee benefits from a protected area, Deka Lash maintains considerable control over marketing and sales channels, which could affect a franchisee's business strategy and revenue potential. A prospective franchisee should carefully consider these factors and how they align with their business goals and marketing expertise.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.