Can Dermani Medspa designate the insurance agent that a franchisee must use?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.6.1. You must maintain in force, at your sole expense, the insurance coverages that we require. We reserve the right to designate the insurance agent you must use to assist you in obtaining the required insurance. We may also, in the future, establish a company-owned package of insurance coverages in which you and all other franchisees must participate, and in this event you would pay insurance premiums to us.
- 8.6.2. Your insurance coverage must be maintained during the term of the Franchise Agreement and must be obtained from a responsible, duly licensed carrier or carriers acceptable to us and having a rating of at least "A" with A.M. Best Company. Currently you must maintain the following insurance:
- (a) business interruption insurance covering a minimum of twelve (12) months of income, including coverage for our continuing fees, and with us named as a loss payee with respect to our continuing fees;
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, Dermani Medspa has the right to designate the insurance agent that franchisees must use to obtain the required insurance coverage. Dermani Medspa may also establish a company-owned package of insurance coverages in the future, in which case franchisees would be required to participate and pay insurance premiums directly to Dermani Medspa.
Dermani Medspa franchisees are required to maintain specific insurance coverages throughout the term of the Franchise Agreement. These policies must be obtained from a duly licensed carrier acceptable to Dermani Medspa with a rating of at least "A" with A.M. Best Company. Currently, franchisees must maintain business interruption insurance covering a minimum of twelve months of income, including coverage for Dermani Medspa's continuing fees, with Dermani Medspa named as a loss payee with respect to these fees.
Dermani Medspa also requires to be named as an additional insured on a primary and non-contributory basis on the following policies: commercial general liability insurance, automobile liability insurance, Professional liability, and umbrella liability insurance. The insurance policies must provide for thirty days' prior written notice to Dermani Medspa of any material modification, cancellation, or expiration. Franchisees must routinely furnish Dermani Medspa with copies of their certificates of insurance or other evidence of maintaining the required coverage and payment of premiums.
If a franchisee fails to obtain and maintain the specified insurance, Dermani Medspa has the right to obtain comparable insurance on the franchisee's behalf. In such cases, the franchisee is required to cooperate and reimburse Dermani Medspa for all premiums, costs, and expenses incurred, plus a ten percent administrative fee. This provision ensures that Dermani Medspa can protect its interests and maintain consistent insurance coverage across all franchise locations.