Can Deka Lash use the Brand Development Fund to cover general operating expenses?

According to Deka Lash's 2024 Franchise Disclosure Document, Deka Lash is limited in its ability to use the Brand Development Fund for general operating expenses. Specifically, Deka Lash will not use the Brand Development Fund to cover general operating expenses, except for a reasonable allocation of overhead. This overhead can include a pro-rata amount of salaries and facilities.

This allocation is restricted to expenses used to develop, research, and administer the promotions, products, and activities that are covered by the Brand Development Fund. This means that while Deka Lash can use the fund to cover some internal costs, those costs must be directly related to marketing and promotional activities.

For a prospective franchisee, this is important because it provides some assurance that the Brand Development Fund will be used primarily for its intended purpose: to benefit the Deka Lash brand through marketing and promotion. Franchisees have the right to request an annual unaudited financial statement of the Brand Development Fund, allowing them to see how the funds are being used. This statement is available 120 days after Deka Lash’s fiscal year end and is provided at the expense of the Brand Development Fund.