Does the Dermani Medspa franchise agreement consider a transfer of ownership interest in the franchisee to be a 'transfer' requiring approval?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2.1. You understand and acknowledge that the rights and duties this Agreement creates are personal to you and that we have granted you the right to develop Franchised Businesses and manage dermani MEDSPA®s in reliance upon our perceptions of your individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, none of the following may be transferred without our prior written approval: (i) this Agreement or any interest in this Agreement; (ii) any Franchise Agreement signed by you, your Owner(s), or any of your affiliates pursuant to this Agreement; (iii) any Franchised Business or any right to receive all or a portion of any Franchised Business's or dermani MEDSPA®'s profits or losses or capital appreciation; (iv) your lease(s), mortgage(s), or other agreement where each Franchised Business or dermani MEDSPA® is or will be located; (v) substantially all of the assets of the Franchised Business and dermani MEDSPA®; (vi) any ownership interest in you (regardless of its size); or (vii) any ownership interest in any of your owners. A transfer of the Franchised Business's ownership, possession, or control, or substantially all of its assets, may be made only with a transfer of this Agreement.
- 7.2.2. In this Agreement, the term "transfer" includes a voluntary or involuntary, direct or indirect, assignment, sale, gift, or other disposition. An assignment, sale, gift, or other disposition includes the following events:
- a) transfer of ownership of capital stock, a partnership or membership interest, or another form of ownership interest;
- b) merger or consolidation or issuance of additional securities or other forms of ownership interest;
- c) any sale of a security convertible to an ownership interest;
- d) transfer of an interest in you, this Agreement, any Franchise Agreement(s), the Franchised Business(es), or substantially all of your assets, or your owners in a divorce, insolvency, or entity dissolution proceeding or otherwise by operation of law; or
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the franchise agreement considers a transfer of ownership interest in the franchisee as a 'transfer' that requires prior written approval from Dermani Medspa. This includes any ownership interest in the franchisee, regardless of its size, or any ownership interest in any of the franchisee's owners.
The Dermani Medspa franchise agreement specifies that the term 'transfer' includes both voluntary and involuntary dispositions, whether direct or indirect, such as assignments, sales, or gifts. Specifically, the transfer of ownership of capital stock, a partnership or membership interest, or another form of ownership interest is included in the definition of 'transfer.' This also extends to events like mergers, consolidations, or the issuance of additional securities or other forms of ownership interest.
This requirement for approval gives Dermani Medspa control over who becomes a franchisee or owner within the franchise system. It allows them to ensure that new owners meet their standards for business experience, aptitude, and financial resources. For a prospective franchisee, this means that any change in ownership structure, even a small one, must be disclosed and approved by Dermani Medspa, adding a layer of administrative process to ownership changes.