In the Dermani Medspa franchise agreement, what specific damages are franchisees limited to recovering in a dispute?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
11.3. Indemnification.
- 11.3.1. You agree to indemnify, defend, and hold harmless the Indemnified Parties against, and to reimburse any one or more of the Indemnified Parties for, all claims, obligations, and damages directly or indirectly arising out of the Franchised Business's operation and/or any operations of the dermani MEDSPA®s you manage, the business you conduct under this Agreement, or your breach of this Agreement, unless the claims, obligations, or damages are determined to be caused solely by our gross negligence or willful misconduct in a final, unappealable ruling issued by a court of competent jurisdiction.
- 11.3.2. Each Indemnified Party may defend any claim against it at your expense and agree to settlements or take any other remedial, corrective, or other actions. We have the right to designate attorneys that you must retain to defend any claims subject to this indemnification provision. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination.
- 11.3.3. An Indemnified Party need not seek recovery from any insurer or other third party, or otherwise mitigate their losses and expenses, in order to maintain and recover fully a claim against you under this subparagraph. You agree that a failure to pursue a recovery or
mitigate a loss will not reduce or alter the amounts that an Indemnified Party may recover from you under this subparagraph.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
Based on the 2025 Dermani Medspa Franchise Disclosure Document, the franchisee's ability to recover damages in a dispute is subject to certain limitations, specifically concerning claims and indemnification. The franchise agreement stipulates that franchisees are responsible for indemnifying Dermani Medspa against various claims, obligations, and damages arising from the operation of the franchised business, any operations of the Dermani Medspa centers they manage, the business conducted under the agreement, or any breach of the agreement. However, this indemnification obligation does not apply if the claims, obligations, or damages are determined to be caused solely by Dermani Medspa's gross negligence or willful misconduct, as decided by a court of competent jurisdiction.
Furthermore, Dermani Medspa has the right to defend any claim against it at the franchisee's expense and can agree to settlements or take other remedial actions. Dermani Medspa also retains the right to designate the attorneys that the franchisee must retain to defend any claims subject to this indemnification provision. This indemnity remains in effect even after the expiration or termination of the franchise agreement.
The agreement also specifies that Dermani Medspa is not obligated to seek recovery from any insurer or other third party, or otherwise mitigate their losses and expenses, in order to maintain and fully recover a claim against the franchisee. The franchisee agrees that failing to pursue recovery or mitigate a loss will not reduce or alter the amounts that Dermani Medspa may recover from them under this provision. This section of the FDD outlines the scope and limitations of liability and indemnification, which are critical for prospective franchisees to understand.