What fees is a Dermani Medspa Practice required to pay the Manager, as stated in the agreement?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
egal risk for Practice and provide and coordinate legal representation in the event of actual or anticipated litigation against Practice. Manager shall assist Practice with instituting in the name of Practice any and all legal actions or proceedings.
| In our opinion, the accompanying | financial statementspresent fairly, in all material respects,the | financial position |
|---|---|---|
| of dermaniMEDSPA Franchising, | LLC as of December 31, 2022, and the results of its operations | and its cash flows |
| for the year then ended in | accordance with accounting principles generally accepted | in the United States of |
SCHEDULE 4.04
PERMITTED RELATIONSHIPS
[List]
EXHIBIT B
ADMINISTRATIVE FEE
**[Note: Listed below are two management fee structure options: a revenue-based fee and a flat fee. Some states, including Florida and North Carolina, have fee-splitting laws that prohibit the use of a percentage-based management fee, including the revenue-based fee formula set forth below. Other states, such as Tennessee and Georgia, allow this fee structure, but only in certain limited situations. You agree to use a revenue-based management fee structure when permitted by state and federal laws and regulations. If a revenue-based management fee is prohibited by law, You agree to implement a flat fee structure.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the fees a Practice pays to the Manager for Administrative Services can be structured in one of two ways: a revenue-based fee or a flat fee. The specific structure depends on state and federal laws regarding fee-splitting. Some states, like Florida and North Carolina, prohibit revenue-based fees, while others, like Tennessee and Georgia, allow them only in limited situations. Dermani Medspa requires franchisees to use a revenue-based fee structure when permitted by law.
Under the revenue-based fee structure, the Practice pays the Manager an Administrative Fee equal to the revenues received for Professional Services, less any expenses of the Practice. If a revenue-based fee is prohibited, the franchisee must implement a flat fee structure.
In the flat fee structure, the Practice pays the Manager a fixed monthly Administrative Fee. The exact amount of this flat fee is not specified in the excerpt but would be detailed in the agreement. If the Practice's revenue in any month is insufficient to cover the full Administrative Fee, the unpaid amount accrues and must be paid in accordance with Article VIII of the agreement. Prospective franchisees should carefully evaluate state law to determine which fee structure is permissible and understand their responsibilities for compliance.