From what dates is the Dermani Medspa Post-Term Period calculated?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
After Termination, Expiration, or Transfer.
9.1.5. Upon termination, transfer, or expiration of this Agreement you agree that, for two (2) years beginning on the later of (i) the effective date of termination, transfer, or expiration, or (ii) the date on which all persons restricted by this Section 9.2 begin to comply with this Section 9.2, or (iii) if litigation is necessary to enforce this Agreement, the date of entry of an order by a court of competent jurisdiction enforcing this Agreement: you and your immediate family members, for yourself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, limited liability company, or other entity, will not own, maintain, operate, engage in, manage, franchise or license, or have any direct or indirect controlling or non-controlling interest as an owner (whether of record, beneficially, or otherwise) or be or perform services as a partner, director, manager, employee, consultant, representative, or agent in any Competitive Business, that is, or is intended to be, located within the Development Area, or within a five (5) mile radius of the boarder of the Development Area or any other dermani MEDSPA® operating at the time the obligations under this Section 8.2 commence, except as permitted by any franchise agreements that remain in effect between you and us. You agree that the length of time in this Section 9.2 will be tolled for any period during which you are in breach of the covenants set forth in this Section 9.2, or any other period during which we seek to enforce this Agreement.
9.1.6. 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 Section 9.
9.2. Individual Covenants.
At our request, you shall require and obtain execution of covenants similar to those set forth in Sections 9.1 and 9.2 (as modified to apply to an individual) from any or all of the following persons: Your Owners, officers and directors.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa FDD, the post-term period, which restricts a franchisee's activities after the franchise agreement ends, is calculated from the later of three possible dates. These dates are (1) the effective date of the termination, transfer, or expiration of the franchise agreement; (2) the date on which all persons restricted by Section 9.2 of the agreement begin to comply with its terms; or (3) if litigation is necessary to enforce the agreement, the date of entry of an order by a court enforcing the agreement.
This means that the two-year restriction on operating a competitive business begins on whichever of these dates occurs last. This could significantly extend the period if Dermani Medspa has to take legal action to enforce the non-compete agreement. The agreement also states that the length of time in Section 9.2 will be tolled for any period during which you are in breach of the covenants set forth in this Section 9.2, or any other period during which Dermani Medspa seeks to enforce this Agreement.
For a prospective Dermani Medspa franchisee, this has important implications. It means the non-compete clock doesn't start ticking until the franchisee and related parties are fully compliant, or until a court order is in place. This could delay the franchisee's ability to re-enter the medical spa business in the same area after their franchise agreement concludes. The franchisee should carefully consider these factors and seek legal counsel to fully understand the restrictions and their potential impact.
It is also important to note that Dermani Medspa may request that the franchisee obtain similar covenants from their owners, officers, and directors, further extending the reach of these post-term restrictions. 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 Section 9.