What condition is the transfer subject to after Dermani Medspa elects not to exercise its rights?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- **13.4.
Renewal Under Law.** Even though we decline to grant you a successor term for the Franchised Business, it is possible that we can be required to do so under a law, rule, regulation, statute, ordinance, or legal order that is applicable at the time.
If that happens, to the extent it is allowed
by the applicable law, rule, regulation, statute, ordinance or order, your successor term will be subject to the conditions of the then-current franchise agreement we are using for new franchisees at the time the successor period begins. If we are not then offering new dermani MEDSPA® franchises, your successor period will be subject to the terms in the then-current franchise agreement that we indicate. If for any reason that is not allowed, the successor term will be governed by the terms of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, even if Dermani Medspa declines to grant a successor term for the Franchised Business, it is possible that they can be required to do so under a law, rule, regulation, statute, ordinance, or legal order that is applicable at the time. If that happens, to the extent it is allowed by the applicable law, rule, regulation, statute, ordinance or order, your successor term will be subject to the conditions of the then-current franchise agreement Dermani Medspa is using for new franchisees at the time the successor period begins. If Dermani Medspa is not then offering new dermani MEDSPA® franchises, your successor period will be subject to the terms in the then-current franchise agreement that they indicate. If for any reason that is not allowed, the successor term will be governed by the terms of this Agreement.
This means that if a local law mandates renewal despite Dermani Medspa's decision not to renew, the terms of the renewal will default to Dermani Medspa's current franchise agreement for new franchisees. This could mean updated fees, operational standards, or other changes that reflect the current state of the Dermani Medspa franchise system. If Dermani Medspa isn't offering new franchises at that time, they'll specify which agreement applies. However, if these conditions aren't legally permissible, the original franchise agreement will remain in effect.
For a prospective franchisee, this clause highlights the importance of understanding local regulations regarding franchise renewals. It also underscores that the terms of a renewed franchise might not be identical to the original agreement, potentially impacting profitability, operational requirements, and the overall business relationship with Dermani Medspa. Franchisees should consult with legal counsel to fully understand their rights and obligations in the event of a non-renewal followed by a legally mandated extension.