Does a transfer to a Controlled Entity trigger Deka Lash's Right of First Refusal?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 14.3 Transfer to a Controlled Entity. A "Controlled Entity" is an entity in which you are the beneficial owner of 100% of each class of voting ownership interest. A transfer to a Controlled Entity shall not trigger the Right of First Refusal, described in Section 14.6 below. At the time of the desired transfer of interest to a Controlled Entity, you must notify us in writing of the name of the Controlled Entity and the name and address of each officer, director, shareholder, member, partner, or similar person and their respective ownership interest. We do not charge a transfer fee for this change.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a transfer to a Controlled Entity does not trigger the Right of First Refusal. A "Controlled Entity" is defined as an entity in which the franchisee is the beneficial owner of 100% of each class of voting ownership interest.
However, the franchisee must notify Deka Lash in writing about the transfer. This notification must include the name of the Controlled Entity and the name and address of each officer, director, shareholder, member, partner, or similar person, along with their respective ownership interest.
Notably, Deka Lash does not charge a transfer fee for transfers to a Controlled Entity. This policy aims to facilitate internal restructuring without penalizing franchisees, provided that the original owner maintains complete control and the franchisor is kept informed about the entity's structure.