Is a Dermani Medspa franchisee prohibited from being an employee of a Competitive Business during the term of the agreement?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, franchisees are restricted from being employed by a Competitive Business during the term of the agreement. Specifically, franchisees cannot perform services as a director, officer, manager, employee, consultant, representative, or agent for a Competitive Business, regardless of where that business is located or operating. This restriction is in place to protect Dermani Medspa's confidential information and business interests.
This non-compete clause ensures that franchisees focus solely on the success of their Dermani Medspa franchise and do not use the knowledge and resources gained from the franchise to benefit a competing business. The FDD defines a "Competitive Business" as medical spa centers or businesses that offer medical spa products or services substantially similar to those offered by Dermani Medspa.
This restriction applies during the entire term of the Franchise Agreement. It is important for prospective franchisees to understand the scope of this restriction and ensure they are not in violation of the agreement. Franchisees should seek written consent from Dermani Medspa if they wish to engage in any activity that could potentially be considered competitive.
This type of restriction is common in franchising to protect the brand and prevent franchisees from using proprietary information to compete, either directly or indirectly, with the franchisor or other franchisees within the system.