What are the two components that determine the Deka Lash Royalty Fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
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ITEM 6 OTHER FEES
| Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty (Notes 1 and 2) | 6% of Gross Studio Sales or $600 per month, whichever is greater. After your 1 st year of operations, the minimum Royalty Fee increases to $1,000 per month. | As specified in the operations manual. Currently we collect royalties twice a month on the 5 th day following the end of each |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the Royalty Fee is determined by two components: a percentage of Gross Studio Sales and a minimum monthly fee. Specifically, the royalty is 6% of Gross Studio Sales or $600 per month, whichever is greater, during the first year of operation. After the first year, the minimum Royalty Fee increases to $1,000 per month.
For a prospective Deka Lash franchisee, this means that they will pay either 6% of their studio's gross sales or a minimum of $600 (increasing to $1,000 after the first year), whichever is higher. This structure ensures that Deka Lash receives a consistent income stream, even if a studio's sales are initially low. It also incentivizes franchisees to increase their sales, as the royalty fee will increase proportionally with their revenue.
It's important to note that "Gross Studio Sales" or "Gross Revenue" includes all revenue generated from the operation of the Franchise from any source. This encompasses sales, memberships, prepaid programs, rentals, products, apparel, gear, vending, exchanges, services, labor, service charges, gross sales on deal sites, service contracts, any other type of remuneration, gift, contra-deal, barter of products or services, charity, payment in kind, or any other benefit or value that is received or deferred to be received. Gross Revenue does not include sales tax, returned merchandise and isolated sales of furniture or fixtures. Credit transactions will be included in Revenue as of the date of the transaction without deduction for uncollected credit accounts. The proceeds from any business interruption insurance or eminent domain recovery you receive will be included in Gross Revenue.
The Royalty Fee is collected twice a month on the 5th day following the end of each semi-monthly period, as specified in the operations manual. Franchisees are required to execute an Automatic Bank Draft Authorization and pay most fees, including the Royalties, via ACH electronic funds transfer.