What is the Dermani Medspa franchisee's obligation regarding maintaining insurance?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
cribe.
- 8.5.2. If you own or control more than one Franchised Business, we reserve the right to require you to be an Entity, and each Franchised Business must be under the direct on-premises supervision of one of your principals who is designated as the Operating Principal for that Franchised Business and who has completed our training program to our satisfaction.
8.6. Insurance.
8.6.1. You must maintain in force, at your sole expense, the insurance coverages that we require. We reserve the right to designate the insurance agent you must use to assist you in obtaining the required insurance. We may also, in the future, establish a company-owned package of insurance coverages in which you and all other franchisees must participate, and in this event you would pay insurance premiums to us.
8.6.2. Your insurance coverage must be maintained during the term of the Franchise Agreement and must be obtained from a responsible, duly licensed carrier or carriers acceptable to us and having a rating of at least "A" with A.M. Best Company. Currently you must maintain the following insurance:
- (a) business interruption insurance covering a minimum of twelve (12) months of income, including coverage for our continuing fees, and with us named as a loss payee with respect to our continuing fees;
(b) commercial general liability insurance with minimum limits of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) annual aggregate;
(c) automobile liability insurance, including owned, hired, and non-owned vehicle coverage, with a minimum combined single limit of One Million Dollars ($1,000,000) per occurrence;
(d) workers' compensation insurance with minimum employers' liability limits of One Million Dollars ($1,000,000) each accident, as well as such other disability benefits type insurance as may be required by statute or rule of the state in which the Medspa is located;
(e) umbrella liability insurance with minimum limits of Two Million Dollars ($2,000,000) per occurrence and annual aggregate;
(f) medical professional liability insurance with minimum limits of One Million Dollars ($1,000,000) per occurrence and Three Million Dollars ($3,000,000) annual aggregate;
(g) property insurance providing coverage for direct physical loss or damage to real and personal property for all risk perils, including the perils of flood and earthquake, with minimum limits of Two Hundred Thousand Dollars ($200,000); and
(h) any insurance required by the terms of your lease or that we may require in the future.
8.6.3.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, franchisees are required to maintain specific insurance coverages at their own expense throughout the term of the Franchise Agreement. Dermani Medspa retains the right to designate the insurance agent franchisees must use or to establish a company-owned insurance package in which all franchisees must participate, paying premiums to Dermani Medspa. The insurance must be obtained from a duly licensed carrier with a rating of at least "A" with A.M. Best Company.
The required insurance includes business interruption insurance covering a minimum of twelve months of income, including coverage for Dermani Medspa's continuing fees, with Dermani Medspa named as a loss payee regarding these fees. Dermani Medspa may periodically increase coverage amounts or require different or additional insurance to reflect inflation, new risks, changes in law, higher damage awards, or other relevant changes. Dermani Medspa and its parent company must be named as additional insured on a primary and non-contributory basis on commercial general liability, automobile liability, professional liability, and umbrella liability insurance policies.
The insurance policies must provide thirty days' prior written notice to Dermani Medspa of any material modification, cancellation, or expiration. Franchisees must routinely furnish copies of their insurance certificates or other evidence of maintaining coverage and premium payments, including completed policy endorsements. If a franchisee fails to maintain the specified insurance, Dermani Medspa may obtain comparable insurance on their behalf and charge the franchisee for all premiums, costs, and expenses incurred, plus a 10% administrative fee.