factual

Does Deka Lash have to use the Brand Development Fund in a specific way?

Deka_Lash Franchise · 2024 FDD

Answer from 2024 FDD Document

We reserve the right to form, change, dissolve or merge any Local Advertising Cooperative. (Franchise Agreement, Section 7.5).

Brand Development Fees. We require you to contribute a monthly Brand Development Fee equal to the greater of 3% of Gross Studio Sales or, after one year of being open, $500 per month. We may use the Brand Development Fund to pay for any costs incurred through third parties or our employment of personnel primarily dedicated to consumer marketing and promotion activities associated with advertising, promotional events, graphic design, photography, video production, branding, public relations, marketing, promotional materials, media, production, and any other activity we believe will benefit Deka Lash, including the creation, maintenance, optimization, and advertising of the company website or other websites, pay per click advertising, and administration of such, creating, conducting, and managing social media, creating, maintenance and promotion of appointment setting software, contests, direct mailers, promotions, and providing promotional materials to our franchisees. We may also use these fees for the support of creation and execution of all materials. We have the right to develop all media and marketing programs (internally or through outside vendors), and have the final decision on all promotions, creative concepts, and media. We may add information about franchise opportunities to advertising and activities supported by the Brand Development Fee. We do not guarantee that you will benefit from the Brand Development Fund in proportion to your contributions. We will not use the Brand Development Fund to defray the cost of our general operating expenses except for reasonable allocation of overhead, including pro-rata amount of salaries and facilities, used to develop, research and administer the promotions, products and activities covered by the Brand Development Fees. By making a written request to us, you may obtain an annual unaudited financial statement of the Brand Development Fund, at the expense of the Brand Development Fund, available 120 days after our fiscal year end. If we do not spend all Brand Development Fees received in a given year, we roll them over and apply them to the Brand Development F

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 32–40)

What This Means (2024 FDD)

According to Deka Lash's 2024 Franchise Disclosure Document, Deka Lash has broad discretion over how the Brand Development Fund is used. Franchisees are required to contribute monthly to the Brand Development Fund, with the amount being the greater of 3% of Gross Studio Sales or, after one year of operation, $500 per month.

Deka Lash may use the Brand Development Fund to cover costs related to consumer marketing and promotion activities. These activities include advertising, promotional events, graphic design, photography, video production, branding, public relations, marketing, promotional materials, media production, and website-related expenses. Deka Lash also has the right to develop all media and marketing programs, either internally or through outside vendors, and has the final say on all promotions, creative concepts, and media.

While Deka Lash may include information about franchise opportunities in its advertising, it does not guarantee that franchisees will directly benefit from the Brand Development Fund in proportion to their contributions. The document states that Deka Lash will not use the Brand Development Fund to cover general operating expenses, except for a reasonable allocation of overhead related to the development, research, and administration of promotions and activities covered by the fund. Franchisees can request an annual unaudited financial statement of the Brand Development Fund, available 120 days after the fiscal year end, at the fund's expense. Any unspent funds are rolled over into the following year. Deka Lash may also use the Brand Development Fees to pay for an independent audit of the Brand Development Fund, if they choose to have one performed.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.