Can a Dermani Medspa franchisee Entity operate any business other than the Franchised Business?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
9. COVENANTS AND RESTRICTIONS ON COMPETITION
- 9.1. During the Term. You acknowledge that this Agreement will give you access to valuable and Confidential Information regarding the System, including our business development strategy and the sales, promotional, managing, and marketing methods of dermani MEDSPA®. You agree that during the term of this Agreement, you will not, without our prior written consent, either directly or indirectly through any other person or entity:
- 9.1.1. develop, build, own, maintain, operate, manage, engage in, franchise, or license, or have any direct or indirect controlling or non-controlling interest as an owner – whether of record, beneficially, or otherwise – in a Competitive Business, wherever located or operating (except that an equity ownership of less than five percent (5%) of a Competitive Business whose stock or other forms of ownership interest are publicly traded on a recognized United States stock exchange will not be deemed to violate this subparagraph);
- 9.1.2. be or perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, wherever located or operating;
- 9.1.3. divert or attempt to divert any actual or potential business or customer of the Franchised Business to a Competitive Business; or
- 9.1.4. In any manner interfere with, disturb, disrupt, impair, diminish, or otherwise jeopardize our business or that of our affiliates or any of our developers or franchisees.
After Termination, Expiration, or Transfer.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa Franchise Disclosure Document, franchisees are restricted from operating competitive businesses during the term of their agreement. Specifically, franchisees cannot, without prior written consent from Dermani Medspa, directly or indirectly engage in or have an ownership interest in a Competitive Business. A Competitive Business is defined as medical spa centers or businesses that offer medical spa products or services substantially similar to those offered by Dermani Medspa. This restriction applies regardless of where the Competitive Business is located or operating. However, an equity ownership of less than five percent (5%) of a Competitive Business whose stock is publicly traded on a recognized United States stock exchange will not violate this restriction.
Additionally, franchisees are prohibited from being a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business. They also cannot divert or attempt to divert any actual or potential business or customer of the Franchised Business to a Competitive Business, or interfere with Dermani Medspa's business or that of its affiliates, developers, or franchisees.
After the termination, expiration, or transfer of the franchise agreement, these restrictions continue. Franchisees are prohibited from owning, maintaining, operating, engaging in, managing, franchising, or licensing a Competitive Business within the Development Area or within a five-mile radius of the border of the Development Area or any other Dermani Medspa operating at the time. These covenants aim to protect Dermani Medspa's confidential information, market share and business interests by preventing franchisees from using the knowledge and experience gained during the franchise term to compete against the Dermani Medspa system.