Does the Dermani Medspa Development Agreement outline any development obligations for the franchisee?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
Pursuant to the terms and conditions of this Agreement, we hereby grant to you the right, and you accept the obligation, to develop a specified number of Franchised Businesses in the Development Area, as set forth Exhibit A attached hereto.
In this regard, you further agree:
- 1.1.1. To develop the Franchised Businesses and dermani MEDSPA®s pursuant to the development schedule set forth in Paragraph 3 of Exhibit A attached hereto (the "Development Schedule").
If at any time during the term of this Agreement you fail to satisfy the Development Schedule, then we have the right, but not the obligation, to exercise our termination rights and other rights pursuant to Section 8 below;
1.1.2. that each dermani MEDSPA® developed under this Agreement must be established and managed by a Franchised Business pursuant to a separate dermani MEDSPA® Franchise Agreement (a "Franchise Agreement") that must be executed as provided in Section 3.1 below; and
1.1.3. that each Franchised Businesses and dermani MEDSPA® developed under this Agreement must be located within the area that is specified in Paragraph 2 of Exhibit A, attached hereto (the "Development Area").
3.1. Exercise of Development Obligations; Franchise Agreements. You must execute a Franchise Agreement for each Franchised Business to be developed hereunder. You must execute the first (1st) Franchise Agreement required under this Agreement contemporaneously with the execution of this Agreement. Notwithstanding the foregoing, we, in our sole discretion, may permit one or more of such Franchise Agreements to be executed by entities other than you; provided that (a) you own a controlling ownership interest in the franchisee entity; (b) we approve the ownership structure of, and each owner of twenty-five percent (25%) or more of the equity in, the franchisee entity; and (c) you or your Operating Principal executes a guarantee, guaranteeing to us the timely payment and performance of the franchisee's obligations under the Franchise Agreement.
3.2. Franchise Agreements. Each dermani MEDSPA® must be located at a site approved by us in writing, within the Development Area, as provided in the Franchise Agreement (the "Premises"). The Franchise Agreement for the first (1st) Franchised Business developed hereunder will be in the form of the Franchise Agreement attached hereto as Exhibit D, and the Franchise Agreement for each additional Franchised Business developed hereunder will be the form of Franchise Agreement being offered generally by us at the time each such Franchise Agreement is executed.
3.3. Development Schedule. Recognizing that time is of the essence, you agree to satisfy each deadline set forth in the Development Schedule in Exhibit A of this Agreement. Your failure to adhere to the Development Schedule will constitute a default under this Agreement as provided in Section 8.2 below. You acknowledge and agree that the time limits and time frames set forth in and inherent in the Development Schedule, and not those in the Franchise Agreement, will govern your obligations in this Agreement.
5.3. Premise Development and Preparation. We will give you mandatory and/or suggested specifications and layouts for your Premises, including color schemes, specific furniture, medical equipment, as well as a planogram for a typical dermani MEDSPA® layout, recommended office size and design, and required or recommended Operating Assets. From time to time, we may develop and provide additional materials (such as templates for contract bids, and sample development checklists) regarding the construction and preparation of a dermani MEDSPA®; to the extent we develop these items, we will make them available to you as part of our Manual or otherwise communicate them to you in writing or through electronic or other formats. We reserve the right to provide guidance to assist you in working with designated contractors and suppliers to complete the development and build out of the dermani MEDSPA® you will manage. You must engage the services of a designer or architect to develop plans for the build-out of your dermani MEDSPA® that are specific to the Premises. You must, at your own expense, prepare the sites and complete all construction, furnishing, remodeling, decorating, and equipping of your dermani MEDSPA® as required by this Agreement and each Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the Development Agreement does outline specific development obligations for the franchisee. The franchisee is granted the right and accepts the obligation to develop a specified number of Franchised Businesses within a designated Development Area, as detailed in Exhibit A of the agreement. The franchisee must adhere to the development schedule outlined in Paragraph 3 of Exhibit A. Failure to meet the development schedule gives Dermani Medspa the right to terminate the agreement. Each Dermani Medspa location must be established and managed under a separate Franchise Agreement, and each location must be within the specified Development Area.
The franchisee must execute a Franchise Agreement for each Dermani Medspa to be developed, with the first agreement executed simultaneously with the Development Agreement. Dermani Medspa retains the discretion to allow entities other than the franchisee to execute subsequent Franchise Agreements, provided the franchisee maintains a controlling ownership interest, Dermani Medspa approves the ownership structure, and the franchisee or their Operating Principal guarantees the franchisee's obligations under the Franchise Agreement. Each Dermani Medspa must be located at a site approved by Dermani Medspa in writing within the Development Area. The initial Franchise Agreement will be in the form attached as Exhibit D, with subsequent agreements using the form generally offered by Dermani Medspa at the time of execution.
Time is of the essence, and the franchisee must meet all deadlines in the Development Schedule in Exhibit A. Failure to adhere to the Development Schedule constitutes a default under the agreement. The time limits in the Development Schedule, not those in the Franchise Agreement, govern the franchisee's obligations under the Development Agreement. Dermani Medspa will provide mandatory and suggested specifications and layouts for the premises, including color schemes, furniture, medical equipment, and a planogram. The franchisee must engage a designer or architect to develop build-out plans specific to the premises and must prepare the sites and complete all construction, furnishing, remodeling, decorating, and equipping at their own expense.