What specific areas of regulation should a C3 Wellness Spa franchisee investigate in their geographic area?

When engaging in this industry, federal, state, and local jurisdictions have laws, rules, and regulations that may apply to your Spa Location Franchise, including: rules and regulations related to health and safety; flow of funds; licensing of cosmetic professionals including aestheticians and estheticians; licensing and requirements as to the ordering, supply, and administration of procedures and services; ownership and control of Spa Location Franchise; construction, zoning, health and safety requirements; employee practices; equal access for the disabled, including requirements imposed by The Americans with Disabilities Act of 1990; and numerous others that may affect the operation, construction and location requirements of your Spa Location Franchise. Key aspects of the healthcare regulatory rules and regulations are outlined below for your reference; however, you should investigate and evaluate how all regulations and requirements specific to your Spa Location Franchisee's geographic area, including but not limited to those listed above and below, apply and impact your operations.

State laws and regulations will vary greatly from state to state so it is critical that each Spa Location Franchise owner evaluate the specific laws and regulations applicable to the geographic area it is operating in. In conducting this evaluation, there are three foundation areas that should be focused on and understood: (1) ownership, (2) diagnosis and treatment, and (3) delegation and supervision. These regulations apply both to a Spa Location Franchise being operated as a Spa and a Spa Management Business.

• (1) Ownership Many states have a single law or collection of laws providing restrictions on ownership and control of medical practices by lay persons or corporations commonly referred to as the corporate practice of medicine doctrine ("CPOM").

The idea behind CPOM is to prevent financial and business interests from interfering with independent medical judgement.

A state's CPOM doctrine can include a wide range of restrictions such as prohibiting a lay person or corporation from employing a physician to practice medicine and collecting the professional fees, restricting the ownership percentage of a practice that can be owned by a physician or non-physician provider such as a nurse practitioner or lay person, and restricting who can serve in management positions of a practice.

These ownership and control restrictions within the state your Spa Location Franchise is located can serve as a determining factor in choosing to own and operate a Spa or Spa Management Business.

Additionally, the CPOM restrictions can affect the way flow of funds need to occur within your franchise structure, especially if operating as a Spa Management Business, as funds need to follow a specific route from professionals to lay persons.

Whether your Spa Location Franchise is operated as a Spa or as a Spa Management Business, under no circumstance shall a lay person (including you as an owner if unlicensed) administer, control, influence, or direct the supervision, administration, delivery or performance of medical or other services requiring an Authorized Care Provider.

Many states require that physicians make a proper disclosure to their patients regarding their affiliation with a person or entity if they will receive, directly or indirectly, remuneration for securing or soliciting the patient. These regulations are typically payor indifferent. It is important to have a healthcare attorney evaluate the state disclosure regulations applicable to the state your Spa Location Franchise will be operating.

Many states have a payor indifferent commercial bribery statute. Typically, a person commits an offense if he or she intentionally or knowingly solicits, accepts, or agrees to accept any benefit from another person on agreement or understanding that the benefit will influence the conduct of the fiduciary in relation to the affairs of his beneficiary. A "fiduciary" may include a physician, nurse practitioner, physician assistant, or other medical provider. It is important to have a healthcare attorney evaluate the state's commercial bribery statute applicable to the state your Spa Location Franchise will be operating.

YOU ARE ADVISED TO CONSULT COUNSEL ABOUT ANY POTENTIAL IMPACT OF THESE LAWS AND REGULATIONS. You alone are responsible for investigating and evaluating the federal, state and local laws that may apply to the operations of your Spa Location Franchise and federal, state and local restrictions that may be imposed on your Spa Location Franchise, your ownership of your Spa Location Franchise, and the individuals that may or may not provide services as employees of your Spa Location Franchise. Before signing a Franchise Agreement, you are strongly advised to consult with a lawyer to review the services and products that will be offered and sold by your Spa Location Franchise and to determine the licensing requirements, construction requirements, medical office layout restrictions, or any other regulation that may or may not be imposed on you, your Spa Location Franchise, the individuals hired by your Spa Location Franchise and whether or not you may legally operate a Spa Location Franchise.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–14)