Can a Dermani Medspa franchisee that is an entity alter its organizational documents without approval from Dermani Medspa?
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)
Based on the 2025 Dermani Medspa Franchise Disclosure Document, a franchisee cannot transfer ownership or control of their business without prior written approval from Dermani Medspa. The term "transfer" is broadly defined to include any voluntary or involuntary change in ownership, including changes to the franchisee's organizational structure.
Specifically, the FDD states that no ownership interest in the franchisee entity can be transferred without Dermani Medspa's prior written approval. This includes the transfer of capital stock, partnership or membership interests, or any other form of ownership interest. It also encompasses events like mergers, consolidations, or the issuance of additional securities that could alter the ownership structure.
This requirement gives Dermani Medspa control over who its franchisees are and ensures that any changes in ownership meet their standards. A prospective franchisee should carefully consider this restriction, as it limits their ability to freely alter their company's organizational documents or ownership without franchisor consent. Failing to obtain this consent could result in a breach of the franchise agreement.