Besides automatic termination, what other remedies does Dermani Medspa have if the franchisee defaults?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
| | | |---|---|---| | Current liabilities | | | | Accrued liabilities | $ 4 | 7,376 | | Unearned revenue, current portion | 1 | 60,325 | | Operating lease liability, current portion | 39,042 | | | Total current liabilities | 2 | 46,743 | | Long-term liabilities | | | | Unearned revenue, net of current portion | 1 | ,204,270 | | Operating lease liability, net of current portion | 267,812 | | | Total long-term liabilities | 1 | ,472,082 | | Total liabilities | 1 | ,718,825 | | Member's deficit | ( 485,562) | | | Total liabilities and member's deficit | $ 1 | ,233,263 | Upon demand by Franchisor, the undersigned each hereby jointly and severally agree to immediately make each payment required of Franchisee under the Agreement and waive any right to require Franchisor to: (a) proceed against Franchisee for any payment required under the Agreement; (b) proceed against or exhaust any security from Franchisee; (c) pursue or exhaust any remedy, including any legal or equitable relief, against Franchisee; or (d) give notice of demand for payment by Franchisee. Without affecting the obligations of the undersigned under this Guarantee, Franchisor may, without notice to the undersigned, extend, modify, or release any indebtedness or obligation of Franchisee, or settle, adjust, or compromise any claims against Franchisee, and the undersigned each hereby jointly and severally waive notice of same and agree to remain and be bound by any and all such amendments and changes to the Agreement.
The undersigned each hereby jointly and severally agree to defend, indemnify and hold Franchisor harmless against any and all losses, damages, liabilities, costs, and expenses (including, but not limited to, reasonable attorney's fees, reasonable costs of financial and other investigation, court costs, and fees and expenses) resulting from, consisting of, or arising out of or in connection with any failure by Franchisee to perform any obligation of Franchisee under the Agreement, any amendment thereto, or any other agreement executed by Franchisee referred to therein.
The undersigned each hereby jointly and severally acknowledge and expressly agree to be individually bound by all of the covenants contained in Section 5 (Marks), Section 6 (Confidentiality), 12 (transfer), 15 (Obligations Upon Termination or Expiration), and 15.4 (Covenant Not to Compete) of the Agreement, and acknowledge and agree that this Guarantee does not grant the undersigned any right to use the "dermani MEDSPA" marks or system licensed to Franchisee under the Agreement.
This Guarantee shall terminate upon the termination or expiration of the Agreement, except that all obligations and liabilities of the undersigned which arose from events which occurred on or before the effective date of such termination shall remain in full force and effect until satisfied or discharged by the undersigned, and all covenants which by their terms continue in force after the expiration or termination of the Agreement shall remain in force according to their terms. Upon the death of an individual guarantor, the estate of such guarantor shall be bound by this Guarantee, but only for defaults and obligations hereunder existing at the time of death; and the obligations of the other guarantors will continue in full force and effect.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, in addition to termination, Dermani Medspa has other remedies if a franchisee defaults. Dermani Medspa can pursue remedies against individuals who guarantee the franchisee's obligations. These guarantors agree to make payments required of the franchisee immediately upon demand by Dermani Medspa. The guarantor waives any right to require Dermani Medspa to first proceed against the franchisee, pursue any security from the franchisee, or exhaust any remedies against the franchisee. Dermani Medspa can modify or release any of the franchisee's obligations without notifying the guarantor, and the guarantor remains bound by these changes.
Furthermore, the guarantor agrees to defend, indemnify, and hold Dermani Medspa harmless from any losses, damages, liabilities, costs, and expenses (including attorney's fees and investigation costs) resulting from the franchisee's failure to perform their obligations under the agreement. The guarantor also acknowledges being individually bound by specific covenants within the franchise agreement, such as those related to Dermani Medspa's marks, confidentiality, transfer restrictions, obligations upon termination or expiration, and non-compete clauses.
Additionally, the franchisee is required to indemnify Dermani Medspa against all claims, obligations, and damages arising from the operation of the franchised business or any breach of the agreement, unless such claims are solely due to Dermani Medspa's gross negligence or willful misconduct. Dermani Medspa can defend any claim at the franchisee's expense and is not required to seek recovery from any insurer or mitigate losses before claiming against the franchisee. This indemnification remains in effect even after the agreement expires or terminates.