Can a Dermani Medspa franchisee change the Operating Principal without the franchisor's consent?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
The "Operating Principal" means the person, shareholder, member, or partner that you designate to be responsible for overseeing and supervising the operation of the Franchised Business, and is the person with whom we will communicate on all major policy, financial, management and operation matters, and the only person from your entity that we will recognize as having authority to communicate for you. The Operating Principal does not need to possess equity interest in the Franchised Business. You may not change the Operating Principal without our prior written consent. We require that all owners, except those that hold a small ownership interest in the franchises (less than 10%), sign a guarantee and assumption of obligations in the form attached to the Franchise Agreement as Exhibit E. Spouses of owners are not required to sign a guarantee and assumption of obligations.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 48–50)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, a franchisee cannot change the Operating Principal without prior written consent from Dermani Medspa. The Operating Principal is defined as the person designated to oversee and supervise the operation of the franchised business. Dermani Medspa will communicate with this person on all major policy, financial, management, and operation matters, and will only recognize this person as having the authority to communicate for the franchisee's entity.
The Operating Principal does not necessarily need to have an equity interest in the franchised business. Dermani Medspa requires all owners, except those holding less than a 10% ownership interest, to sign a guarantee and assumption of obligations. Spouses of owners are not required to sign this guarantee.
This requirement ensures that Dermani Medspa maintains a consistent point of contact and control over the operations of each franchise. It is a fairly common practice in franchising to require franchisor approval for key management positions to protect brand standards and operational consistency. A prospective franchisee should carefully consider this requirement and ensure they have a suitable Operating Principal who meets Dermani Medspa's standards and with whom the franchisor is comfortable working.