Under the Deka Lash Development Agreement, what is the Developer required to do regarding the number of Franchised Businesses?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.1 Minimum Obligations. Developer must ensure that, at a minimum, Developer will:
- a) Open and commence operations of a minimum of (i) 20% of the number of Franchised Businesses allowed under this Area Development Agreement each year or (ii) one Franchised Business per year, whichever is greater;
- b) Open and commence operations of the required number of new Franchised Businesses during each specified development period set forth in the Development Schedule described in the attached Developer Data Sheet, the terms of which are herein incorporated into this Agreement (each, a "Development Period"); and
- c) Have the minimum cumulative number of Franchised Businesses open and operating at the expiration of each Development Period set forth in the Development Schedule described in the attached Developer Data Sheet.
- 5.2 Development Schedule Extension & Fees. In the event that you fail to meet your development obligations, and you are (a) current on your obligations owed to us, (b) in compliance with your franchise agreement(s) and (c) showing a good faith effort in trying secure and open your next scheduled studio, then the following will occur:
- a) Extension with Release (6 months). Per written notice to us and execution of a general release in our favor, we will grant you a one-time, six-month extension to your development schedule with no Delayed Opening Fee. This six-month extension can only be used once during your development agreement and delays all subsequent development dates by 6 months.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to the 2024 Deka Lash Franchise Disclosure Document, a Developer entering into an Area Development Agreement must meet certain minimum obligations regarding the number of Franchised Businesses they open and operate. Specifically, the Developer must open and commence operations of a minimum of either 20% of the total number of Franchised Businesses allowed under the Area Development Agreement each year, or at least one Franchised Business per year, whichever is greater.
Additionally, the Developer is obligated to open and commence operations of the required number of new Franchised Businesses during each specified development period as outlined in the Development Schedule, which is detailed in the attached Developer Data Sheet and incorporated into the agreement. The Developer must also ensure that the minimum cumulative number of Franchised Businesses are open and operating by the expiration of each Development Period, as also specified in the Development Schedule.
If a Deka Lash Developer fails to meet these development obligations, they may be granted a one-time, six-month extension to their development schedule under certain conditions. These conditions include being current on all obligations owed to Deka Lash, being in compliance with their franchise agreement(s), and demonstrating a good faith effort in trying to secure and open their next scheduled studio. To obtain this extension, the Developer must provide written notice to Deka Lash and execute a general release in their favor. This extension delays all subsequent development dates by six months and can only be used once during the development agreement.