Is there a fee associated with the one-time, six-month extension to the Deka Lash development schedule?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
obligations owed to us, (b) in compliance with your franchise agreement(s) and (c) showing a good faith effort in trying secure and open your next scheduled studio, then the following will occur:
- a) Extension with Release (6 months). Per written notice to us and execution of a general release in our favor, we will grant you a one-time, six-month extension to your development schedule with no Delayed Opening Fee. This six-month extension can only be used once during your development agreement and delays all subsequent development dates by 6 months.
- b) Delayed Opening Fee Assessed (for up to 12 months). For each month you are behind on your Development Schedule (Extension with Release excluded), you will be charged a Delayed Opening Fee of $500 for each studio when that studio becomes due. For example, if you have 3 undeveloped units behind schedule, your Delayed Opening Fee will be $1,500 per month. This Development Schedule Extension Fee must be paid to us with our then-current royalty collections process. For each month this is paid, your development schedule for each of those unit rights will be extended by one month. We will allow you to pay a Delayed Opening Fee for up to 12 months.
- c) Loss of Protected Territory. If at any point you (a) do not pay your delayed opening fee, (b) stop or refute our ability to ACH this transaction, (c) notify us, in writing, tha
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
Based on the 2024 Deka Lash Franchise Disclosure Document, there is no mention of a fee associated with a one-time, six-month extension to the development schedule. However, the document does state that for each month a franchisee is behind on their Development Schedule (Extension with Release excluded), they will be charged a Delayed Opening Fee of $500 for each studio when that studio becomes due. For example, if a franchisee has 3 undeveloped units behind schedule, their Delayed Opening Fee will be $1,500 per month. This Development Schedule Extension Fee must be paid to Deka Lash with their then-current royalty collections process. For each month this is paid, the development schedule for each of those unit rights will be extended by one month, up to 12 months.
According to the FDD, if a Deka Lash franchisee does not pay their delayed opening fee, stops or refutes Deka Lash's ability to ACH this transaction, notifies Deka Lash in writing that they no longer want to be charged the delayed opening fees, or after a period of 12 months of paying the delayed opening fee, they will immediately lose their protected territory rights. Additionally, if a franchisee is not current on their obligations owed to Deka Lash, not in compliance with their Franchise Agreement(s) or Development Agreement, or not showing a good faith effort in trying secure and open their next scheduled studio, their territory and remaining development rights will be immediately terminated.
It is important to note that Deka Lash reserves the right to revise these options at any time. Therefore, a prospective franchisee should confirm the current policy regarding development schedule extensions and associated fees with Deka Lash directly.