How does Dermani Medspa account for advertising costs?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
ting from the failure of franchisees to make required payments. The Company reviews the receivable balance on a periodic basis and makes allowances when there is a substantial doubt as to the collectability of individual balances. T
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa Franchise Disclosure Document, advertising costs are expensed as incurred and are made at the Company's discretion. This means that Dermani Medspa recognizes advertising expenses in the period they occur rather than capitalizing and amortizing them over a longer period. For the year ending December 31, 2023, Dermani Medspa's advertising expense was $161,105.
Dermani Medspa also utilizes a System Marketing Fund, which is funded by franchisee contributions. This fund is used exclusively for maintaining, administering, and directing advertising, marketing, public relations, and promotional programs aimed at enhancing the Dermani Medspa brand. The franchisor has the right to establish this fund.
The System Marketing Fund is managed at Dermani Medspa's discretion to meet the costs of advertising and promotional programs. While Dermani Medspa aims to enhance the brand and benefit all franchised businesses, it does not guarantee that expenditures will be proportionate to contributions from franchisees in specific geographic areas or that any franchised business will directly benefit in proportion to its contribution. Dermani Medspa prepares an annual, unaudited statement of the System Marketing Fund's collections and expenses, which is available for review upon written request 120 days after the fiscal year-end.