Can a Dermani Medspa franchisee commence litigation against Dermani Medspa complaining of modifications to the system?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
**8.8.
Modification of System Standards.** We periodically may modify System Standards, and these modifications may obligate you to invest additional capital in the Franchised Business and/or incur higher operating costs.
You agree to implement any changes in System Standards within the time period we request, whether they involve refurbishing or remodeling the Premises or any other aspect of the Franchised Business, buying new Operating Assets, adding new services, or otherwise modifying the nature of your operations, as if they were part of this Agreement as of the Effective Date.
8.7. Compliance with System Standards.
8.7.1. You acknowledge and agree that operating and maintaining the Franchised Business according to System Standards is essential to preserve the goodwill of the Marks and all
Franchised Businesses and Medspas. Therefore, you agree at all times to operate and maintain the Franchised Business according to all of our System Standards. Although we retain the right to establish and periodically modify System Standards, you retain the right to and responsibility for the day-to-day management and operation of the Franchised Business and implementing and maintaining System Standards at the Franchised Business. If you fail to implement, maintain, and/or comply with System Standards, we may terminate your right to operate the Franchised Business, and/or take other actions to enforce the System Standards.
"Claims" – all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party incurs in defending itself, including reasonable accountants ', attorneys', and expert witness fees, costs of investigation, proof of facts, court costs, travel and living expenses, and other expenses of litigation or alternative dispute resolution, whether or not it has commenced.
MEDSPA®. The Franchisee Group further indemnifies and holds the Franchisor Group harmless against, and agrees to reimburse them for any loss, liability, expense, or damages (actual or consequential)
including, without limitation, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, and other litigation and travel and living expenses, which any member of the Franchisor Group may suffer with respect to any claims or causes of action which any customer, creditor, or other third party now has, ever had, or hereafter would or could have, as a result of, arising from, or under the Franchise [Development] Agreement, the Franchised Business, or the dermani MEDSPA®, but only to the extent such liability relates to actions occurring prior to the Effective Date.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
The 2025 Dermani Medspa Franchise Disclosure Document does not explicitly prohibit a franchisee from commencing litigation against Dermani Medspa regarding modifications to the system standards. However, the FDD states that Dermani Medspa may periodically modify System Standards, potentially obligating the franchisee to invest additional capital or incur higher operating costs. Franchisees must implement these changes within the specified time frame, as if the changes were part of the original agreement. This includes refurbishing or remodeling the premises, buying new operating assets, adding new services, or otherwise modifying operations.
While franchisees must adhere to System Standards, they retain the right to and responsibility for the day-to-day management and operation of the Franchised Business and implementing and maintaining System Standards at the Franchised Business. Failure to comply with System Standards may result in termination of the franchise or other enforcement actions by Dermani Medspa.
The FDD also includes a definition of "Claims" as all obligations, damages, and costs incurred in defending against legal action. Additionally, the franchisee agrees to indemnify and hold harmless Dermani Medspa from any losses, liabilities, expenses, or damages, including attorney's fees, arising from the Franchise Agreement or the operation of the Dermani Medspa.
Given these provisions, while a franchisee may theoretically commence litigation, the agreement emphasizes compliance with System Standards and includes indemnification clauses that could place a significant financial burden on the franchisee in the event of a legal challenge. A prospective franchisee should consult with a legal professional to fully understand their rights and obligations regarding modifications to the system and the potential implications of initiating litigation against Dermani Medspa.