Under what circumstances can Deka Lash withhold or condition consent to a transfer?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Your rights under this Agreement are personal and you may not sell, transfer, or assign any right granted herein, including but not limited to a transfer, sale, or assignment of any shares, stock, membership, or other ownership interest in this Agreement. Notwithstanding, if you are an individual, you may assign your rights under this Agreement to a corporation or limited liability company that is wholly owned by you according to the same terms and conditions as provided in your initial Franchise Agreement. We, at our discretion, have the right to assign this Agreement to a person or entity who remains bound by its terms.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Deka Lash has rights regarding the sale or assignment of the Development Agreement. Specifically, the agreement states that the rights granted to the developer are personal and cannot be sold, transferred, or assigned. However, if the developer is an individual, they may assign their rights to a corporation or limited liability company that is wholly owned by them, provided it adheres to the same terms and conditions as the initial Franchise Agreement. Deka Lash retains the discretion to assign the agreement to another party who remains bound by its terms.
This means that as a Deka Lash developer, your ability to transfer the rights you've been granted is limited. You cannot freely sell or assign the agreement to just anyone. This restriction ensures that Deka Lash maintains control over who is developing franchises within a given area and that the new entity meets their standards.
However, there is an exception: if you operate as an individual, you can transfer the agreement to a corporation or LLC that you wholly own. This provides some flexibility for structuring your business while still ensuring that you remain in control. Any transfer or assignment outside of this exception is subject to Deka Lash's approval, which they can grant or deny at their discretion. This clause underscores the importance of understanding the terms of the Development Agreement and the limitations it places on your ability to transfer your rights.