Upon termination or expiration of the Deka Lash Franchise Agreement, what right does Deka Lash have regarding the furniture, equipment, signage, fixtures, and supplies?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Studio Design, Furniture, Fixtures, and Equipment. Your unit's design, layout, color patterns, signage, supplies, furniture, fixtures, and equipment are considered intellectual property and proprietary to us and as such, we retain all rights and control associated therewith. As such, upon termination or expiration of your Franchise Agreement, at our option, you will offer to us the right to purchase from you any or all of the furniture, equipment, signage, fixtures, and supplies within 30 days of the date of termination for the adjusted book value, which is the undepreciated book value of the assets on your most recently filed federal tax return prior to the date of the termination or expiration. If we elect not to purchase any or part of the furniture, equipment, signage, fixtures, and supplies to a current franchisee of ours, or destroy the furniture, equipment, signage, fixtures, and supplies such that they cannot be re-used.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 45–47)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the studio's design, layout, color patterns, signage, supplies, furniture, fixtures, and equipment are considered Deka Lash's intellectual property. Upon termination or expiration of the Franchise Agreement, Deka Lash has the option to purchase any or all of the furniture, equipment, signage, fixtures, and supplies.
If Deka Lash chooses to exercise this option, the franchisee must offer these items to Deka Lash within 30 days of the termination date. The purchase price will be the adjusted book value, which is defined as the undepreciated book value of the assets on the franchisee's most recently filed federal tax return prior to the termination or expiration date.
If Deka Lash decides not to purchase the items, the franchisee is then obligated to either sell the furniture, equipment, signage, fixtures, and supplies to a current Deka Lash franchisee or destroy them to prevent reuse. This ensures that the brand's image and standards are maintained even after a franchise ceases operation.