What activities are prohibited under the non-competition covenants during the term of the Dermani Medspa franchise, as outlined in Article 7?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| to you and without restriction. | ||
| k. “Transfer” by you – defined | Section 12.2 | Includes any sale, assignment, gift, conveyance, pledge, mortgage or other encumbrance or disposition of any interest in the Franchise Agreement, the Franchised Business or you (if you are not a natural person). |
| l. Our approval of transfer by you | Section 12.3 | You may not transfer the Franchise Agreement without our prior written consent. We will not unreasonably withhold our consent. Our consent to a transfer is not a waiver of any claims we have against you. |
| m. Conditions for our approval of transfer | Section 12.3 | Your full compliance with the Franchise Agreement; our approval of transferee; you are current in fees owed to us; transferee signs then-current franchise agreement; payment of transfer fee; release signed; you comply with non-competition covenants; all obligations to us satisfied; and others. |
| n. Our right of first | Section 12.6 | We have the right of first refusal if you determine to sell |
| refusal to acquire your | or transfer your interest in the franchisee, the Franchise | |
| business | Agreement or the Franchised Business. | |
| o. Our option to purchase your business | Section 15.5 | Upon termination or expiration of the Franchise Agreement, we have the right to purchase all or a portion of the assets of your Franchised Business at their fair market value. |
| p. Your death or disability | Section 12.5 | Your estate must transfer your interest in the Franchised Business to a third party we approve within 12 months after death or disability. Your estate must appoint a manager within 30 days of death or disability and an Operating Principal within 90 days after death or disability |
| q. Non-competition covenants during the term of the franchise | Article 7 | Includes a prohibition on engaging in Competitive Business, including any medspa, medical care center, or business that offers or provides laser hair removal, skin rejuvenation, chemical peels, body contouring/skin tightening, microneedling, dermaplaning, or injections for a medical center, medical care practice management business, or any other product or service or management service that is similar to the services and products or servicesauthoriz |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 51–58)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa Franchise Disclosure Document, Article 7 of the Franchise Agreement outlines the non-competition covenants during the term of the franchise. This includes a prohibition on engaging in any Competitive Business, including any medspa, medical care center, or business that offers or provides specific services. These services include laser hair removal, skin rejuvenation, chemical peels, body contouring/skin tightening, microneedling, dermaplaning, or injections for a medical center, medical care practice management business, or any other product or service or management service that is similar to the services and products authorized to be offered or sold under the Marks and the System.
For a prospective Dermani Medspa franchisee, this means that while operating the franchise, they are restricted from owning or working for any business that competes directly with Dermani Medspa. The restrictions extend to a broad range of services typically offered by medspas and medical care centers, ensuring that franchisees focus solely on developing and growing their Dermani Medspa business without divided interests.
This non-competition covenant is a standard practice in franchising to protect the franchisor's brand and market share. Franchisees should carefully consider these restrictions and ensure they do not have any conflicting business interests before entering into the agreement. Understanding the scope of these restrictions is crucial for planning future business activities and ensuring compliance with the franchise agreement.