Under what condition will Deka Lash defer the payment of initial fees?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
HAWAII ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control
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- Initial Fee Deferral. The Franchise Agreement is modified to also provide that we defer the payment of all initial fees paid by you to us until we have performed all pre-opening obligations and you are open for business.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, the payment of initial fees is deferred until certain pre-opening obligations are met and the franchise is open for business, but this deferral is only applicable in specific locations. Specifically, the Franchise Agreement is modified to defer all initial fees until Deka Lash has performed all pre-opening obligations and the franchisee is open for business, but only in Hawaii.
Similarly, the Area Development Agreement is modified to defer the receipt of the initial franchise fee until all initial obligations owed to the franchisee under the franchise agreement or other documents have been fulfilled by Deka Lash and the franchisee is open for business, but this deferral is only applicable in North Dakota.
This means that for franchisees in Hawaii and North Dakota, the initial franchise fee is not due upfront. Instead, it becomes payable only after Deka Lash has completed its pre-opening responsibilities, such as site selection assistance, training, and providing the operations manual, and the franchisee has opened their Deka Lash studio for business. This arrangement can significantly reduce the initial financial burden on new franchisees, allowing them to allocate their capital towards other essential startup costs like leasehold improvements, inventory, and marketing.