Under what conditions can a Deka Lash franchisee terminate the franchise agreement?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
6. TERM AND TERMINATION
- 6.1 Term. This Agreement will commence as of the date it is fully executed and, unless earlier terminated by us, will end on the earlier of a) the last day of the calendar month that the final Franchised Business is required to be opened and operating under the Development Schedule or b) the date you execute a lease for the final Franchised Business required to be opened and operating under the Development Schedule. Upon expiration or termination of this Agreement for any reason, you will not have any rights within the Development Area other than the territorial rights granted in the franchise agreement executed in connection with any Franchised Businesses that you have opened and commenced operating as of the date this Agreement is terminated or expires.
- 6.2 Termination. Any material violation or breach of any Franchise Agreement or this Agreement will be deemed a material violation of this Agreement and any and all Franchise Agreements between the parties. The non-breaching party will be entitled to enforce the penalties of or to terminate this Agreement or the relevant Franchise Agreement(s) as provided in the relevant Franchise Agreement(s) for enforcement or termination. In addition, Franchisor will have the right, at its option, to terminate this Agreement and all rights granted to Developer hereunder, without affording Developer any opportunity to cure such default, effective upon written notice to Developer, upon the occurrence of any of the following events:
- a) Cease to Actively Engage. If Developer ceases to actively engage in development activities in the Development Area or otherwise abandons its development business for three (3) consecutive months, or any shorter period that indicates an intent by Developer to discontinue development of the Franchised Businesses within the Development Area;
- b) Insolvency. If Developer becomes insolvent, meaning unable to pay bills in the ordinary course of business as they become due;
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
Based on the 2024 Deka Lash Franchise Disclosure Document, the document does not specify the conditions under which a franchisee can terminate the franchise agreement. The document only mentions that Deka Lash has the right to terminate the agreement under certain conditions.
Item 23 discusses termination in the context of the Developer failing to meet development obligations or the termination of an associated franchise agreement by Deka Lash. It also mentions that upon termination or expiration of the agreement, the franchisee's right to use listings (telephone numbers, internet listings, etc.) terminates, and the franchisee must transfer these listings to Deka Lash.
Since the FDD excerpts do not detail the franchisee's termination rights, prospective franchisees should directly ask Deka Lash about the specific conditions and procedures under which they, as franchisees, can terminate the Franchise Agreement. Understanding these conditions is crucial for making an informed investment decision.