What constitutes a 'transfer' requiring Dermani Medspa's approval, including both voluntary and involuntary actions?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2.1. You understand and acknowledge that the rights and duties this Agreement creates are personal to you and that we have granted you the right to develop Franchised Businesses and manage dermani MEDSPA®s in reliance upon our perceptions of your individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, none of the following may be transferred without our prior written approval: (i) this Agreement or any interest in this Agreement; (ii) any Franchise Agreement signed by you, your Owner(s), or any of your affiliates pursuant to this Agreement; (iii) any Franchised Business or any right to receive all or a portion of any Franchised Business's or dermani MEDSPA®'s profits or losses or capital appreciation; (iv) your lease(s), mortgage(s), or other agreement where each Franchised Business or dermani MEDSPA® is or will be located; (v) substantially all of the assets of the Franchised Business and dermani MEDSPA®; (vi) any ownership interest in you (regardless of its size); or (vii) any ownership interest in any of your owners. A transfer of the Franchised Business's ownership, possession, or control, or substantially all of its assets, may be made only with a transfer of this Agreement.
- 7.2.2. In this Agreement, the term "transfer" includes a voluntary or involuntary, direct or indirect, assignment, sale, gift, or other disposition. An assignment, sale, gift, or other disposition includes the following events:
- a) transfer of ownership of capital stock, a partnership or membership interest, or another form of ownership interest;
- b) merger or consolidation or issuance of additional securities or other forms of ownership interest;
- c) any sale of a security convertible to an ownership interest;
- d) transfer of an interest in you, this Agreement, any Franchise Agreement(s), the Franchised Business(es), or substantially all of your assets, or your owners in a divorce, insolvency, or entity dissolution proceeding or otherwise by operation of law; or
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, a 'transfer' encompasses a broad range of actions, both voluntary and involuntary, that require the franchisor's prior written approval. Dermani Medspa emphasizes that the rights and duties created by the franchise agreement are personal to the franchisee, and the franchisor has granted the franchise based on their assessment of the franchisee's character, skills, business acumen, and financial capacity. This is a fairly standard practice in franchising, as franchisors want to ensure that any new operator meets their standards to protect the brand.
The term 'transfer' includes any direct or indirect assignment, sale, gift, or other disposition, whether voluntary or involuntary. Specifically, this includes the transfer of ownership of capital stock, partnership, or membership interests, as well as mergers, consolidations, or the issuance of additional securities. It also covers any sale of securities convertible to an ownership interest. Furthermore, transfers of interest in the franchisee, the franchise agreement, the franchised business, or substantially all of the franchisee's assets, including those occurring in divorce, insolvency, entity dissolution proceedings, or by operation of law, are considered transfers.
For a potential Dermani Medspa franchisee, this means that any change in ownership or control of the franchise, no matter how it occurs, will require the franchisor's approval. This includes not only outright sales or assignments but also events like divorce or bankruptcy that might lead to a change in ownership. Dermani Medspa retains significant control over who can operate a franchise, ensuring that all operators meet their standards and that the brand's reputation is maintained. Franchisees should be aware of these restrictions and plan accordingly, especially when structuring their business or considering future exit strategies.