Under what conditions is a Deka Lash franchisee required to pay the Prospect Generation Fee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Prospect | The actual cost | Prior to us giving | In the event you decide to sell |
| Generation | incurred by us, including commissions and fees charged by business brokers in cases where the buyer is identified through such broker. | consent to transfer your operating studio. | your operating studio to a prospective franchisee that comes from a lead generated through us (including broker networks, consultants, and referral sources used by us) you will be required to pay us a Prospect Generation Fee to reimburse us for our associated expenses before we will consent to the transfer of the operating studio to such a buyer. This fee is in addition to the Transfer Fee. |
| Fee |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, a franchisee is required to pay a Prospect Generation Fee under specific circumstances related to the sale of their studio. If a franchisee decides to sell their Deka Lash operating studio and the buyer is a lead generated by Deka Lash itself (or through its brokers, consultants, or referral sources), the franchisee must pay this fee.
The Prospect Generation Fee is designed to reimburse Deka Lash for the expenses they incur in generating the lead that ultimately results in the sale of the franchise. This includes commissions and fees charged by business brokers if they were involved in identifying the buyer. The fee must be paid before Deka Lash will consent to the transfer of the operating studio to the new buyer.
It's important to note that the Prospect Generation Fee is in addition to the standard Transfer Fee, which is a separate cost associated with transferring the franchise to a new owner. The amount of the Prospect Generation Fee is the actual cost incurred by Deka Lash. This condition ensures that Deka Lash is compensated for its efforts in finding a suitable buyer for an existing franchise, but it also adds an additional expense for the selling franchisee to consider during the transfer process.