What businesses does Dermani Medspa consider to be a 'Competitive Business'?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
demonstrate came to Member's attention by lawful means prior to disclosure to Member or which, at the time of the disclosure to Member, had become a part of the public domain. In addition, there may be certain, limited circumstances where applicable law allows for the disclosure of certain trade secrets, as specified in the Manuals.
2. Covenants Not to Compete.
(a) Member specifically acknowledges that, pursuant to the Area Development Agreement, and by virtue of his or her position with Developer, Member will receive valuable specialized training and Confidential Information, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques of Franchisor and the System.
(b) Member covenants and agrees that during the term of the Area Development Agreement, except as otherwise approved in writing by Franchisor, Member will not, either directly or indirectly, for him or herself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, or entity:
(i) develop, build, own, maintain, operate, manage, engage in, franchise, or license, or have any direct or indirect controlling or non-controlling interest as an owner – whether of record, beneficially, or otherwise – in medical spa centers or businesses that offer medical spa products or services substantially similar to those then offered by dermani MEDSPA®s ("Competitive Business");
(ii) be or perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, wherever located or operating;
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa FDD, a 'Competitive Business' is defined as medical spa centers or businesses that offer medical spa products or services substantially similar to those offered by Dermani Medspa. This definition is relevant to the non-compete covenants that Dermani Medspa requires of its area developers and franchisees. These covenants restrict involvement in competitive businesses during the term of the agreement and for a specified period afterward.
The FDD specifies that during the term of the Area Development Agreement, members (area developers) are prohibited from developing, owning, operating, managing, engaging in, franchising, or licensing a Competitive Business, or having any direct or indirect interest in such a business. They are also restricted from acting as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business. Furthermore, members cannot divert business or customers from the Franchised Business to a Competitive Business, or interfere with Dermani Medspa's business or its affiliates.
After the Area Development Agreement ends, the restrictions continue. For a period defined as the Post-Term Period, members cannot own, operate, manage, franchise, or be involved with a Competitive Business within the Development Area or within a five-mile radius of it, or any other Dermani Medspa operating at the time. However, an exception exists where an equity ownership of less than five percent (5%) of a Competitive Business whose stock or other forms of ownership interest are publicly traded on a recognized United States stock exchange will not be deemed to violate this subparagraph. These restrictions are designed to protect Dermani Medspa's confidential information, market share and business interests.