What is the Dermani Medspa franchisee's obligation regarding covenants from Owners, officers, and directors?

According to Dermani Medspa's 2025 Franchise Disclosure Document, the franchisee has an obligation to obtain non-compete covenants from their Owners, officers, and directors. Dermani Medspa can request that the franchisee require and obtain execution of covenants similar to those outlined in Sections 9.1 and 9.2 of the franchise agreement from the franchisee's Owners, officers, and directors. These covenants would be modified to apply to the individual in question.

Section 9.1 of the Dermani Medspa franchise agreement states that during the term of the agreement, the franchisee will not engage in any competitive business activities. This includes developing, owning, or operating a business that offers similar medical spa products or services. It also prohibits the franchisee from being employed by or acting as a consultant for a competing business. The franchisee is also barred from diverting business or customers away from the Dermani Medspa franchise. An exception exists for owning less than 5% of a publicly traded competitor.

Section 9.2 outlines restrictions after termination, expiration, or transfer of the Dermani Medspa franchise agreement. For two years, the franchisee and their immediate family cannot be involved in a competitive business within the Development Area or a five-mile radius of any Dermani Medspa location. This restriction includes owning, operating, or working for a competing business. The time period may be extended if the franchisee breaches the covenants or if Dermani Medspa has to enforce the agreement through litigation. Again, an exception exists for owning less than 5% of a publicly traded competitor.