What is the estimated security deposit amount used in the initial investment calculation for a Dermani Medspa?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
high estimate assumes that both architectural and MEP plans will need to be prepared.
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- Real Estate; Site Evaluation; Prepaid Rent and Security Deposit. The prototypical dermani MEDSPA® is approximately 1,500 to 2,000 square feet in size. The cost per square foot for leasing commercial space varies considerably depending upon the location and market conditions affecting commercial property. We estimate the cost of leasing commercial space per square foot to be between $25 and $50 annually (although this figure can vary significantly from market to market). The amounts in the chart reflect our estimate for your payment of rent for the first three months of operations at the dermani MEDSPA®. You may also be required to pay prepaid rent and/or a security deposit in connection with leasing space for the operation of the dermani MEDSPA®. Landlords will vary in the amount they charge for a security deposit; from $0 to as much as six months' rent. We have used a security deposit of one month's rent for the estimate. You should consult a real estate broker and/or other professional in your area to assess the typical leasing costs for your target market area.
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- Leasehold Improvements. You will need to construct improvements of, or "build out," the premises at which you will operate the Franchised Business and manage the dermani MEDSPA®. These improvements may include, for example, wiring, flooring, sheetrock, plumbing, paint, HVAC, lighting, and décor items which must be constructed according to our specifications.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 20–26)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the estimated initial investment includes a security deposit calculated as one month's rent. The FDD notes that landlords may charge security deposits ranging from $0 to as much as six months' rent, but Dermani Medspa uses one month's rent for its estimates. The document estimates the cost of leasing commercial space to be between $25 and $50 annually per square foot, though this can vary significantly. The prototypical Dermani Medspa is approximately 1,500 to 2,000 square feet in size.
The estimated initial investment chart includes a line item for "Real Estate; Prepaid Rent, Utility, and Security Deposit" with a low estimate of $17,088 and a high estimate of $36,178. This range accounts for the first three months of rent, utilities, and the security deposit. The actual amount required for a security deposit will depend on the specific lease terms negotiated by the franchisee with their landlord.
Prospective franchisees should consult with a real estate broker in their target market to assess typical leasing costs and security deposit requirements. This due diligence will help them refine their initial investment estimates and ensure they have adequate capital to secure a suitable location for their Dermani Medspa franchise. Understanding local market conditions is crucial, as the FDD acknowledges that real estate costs can vary significantly from market to market.