Does the Dermani Medspa franchisor have the right to operate Dermani Medspas outside the franchisee's territory?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
We will retain all other rights, and therefore we retain the right (among others), and without granting to you:
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- the right to operate, and to grant others the right to operate, Franchised Businesses, dermani MEDSPA®s, and similar medical management businesses or similar medspas or medical centers under different names or marks located anywhere within or outside the Development Area under any terms and conditions we deem appropriate and regardless of proximity to any of your dermani MEDSPA®s or the Development Area;
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- the right to establish and operate (and to grant to others the right to establish and operate) any other businesses offering products and services that are different from the products or services offered at dermani MEDSPA®s through similar or dissimilar channels of distribution (including, but not limited to: (i) sales through direct marketing, such as over the Internet or through catalogs or telemarketing; (ii) sales through retail stores that do not operate under the Marks; and (iii) sales made at wholesale), at any locations inside or outside the Development Area under trademarks or service marks other than the Marks and on any terms and conditions we deem appropriate;
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- the right to acquire the assets or ownership interests of one or more businesses that operate, and/or has granted franchises, licenses, or similar rights to one or more third parties to operate, businesses similar to and/or competing with dermani MEDSPA®s and Franchised Businesses related to dermani MEDSPA®s, and/or the right to be acquired by a competing medical business or medical management business, or by another business, even if such business operates, franchises and/or licenses competitive businesses in the Development Area, and if we acquire, or are acquired by, such a competing business or chain, we may establish or grant franchises or licenses to establish new or additional competing businesses under the Marks or the acquired chain's marks in your Development Area, and we may rebrand such existing businesses in your Development Area to use the Marks and the System, and it is expressly acknowledged by you and us that any such business operations of the same or similar business that existed or operated at the time of such acquisition or transaction shall not constitute a breach of the Development Agreement;
Source: Item 12 — TERRITORY (FDD pages 43–46)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the franchisor retains significant rights regarding the operation of Dermani Medspa businesses both inside and outside a franchisee's territory. Specifically, Dermani Medspa reserves the right to operate or grant others the right to operate Franchised Businesses, Dermani Medspa locations, and similar medical management businesses or medspas under different names or marks anywhere outside the franchisee's territory. These operations can occur under any terms and conditions that Dermani Medspa deems appropriate, regardless of their proximity to the franchisee's location.
This means that a Dermani Medspa franchisee's territory is not exclusive in the broader sense. Dermani Medspa can establish other outlets, including those with similar concepts but different branding, outside the franchisee's protected area. This also extends to non-traditional locations such as mobile clinics or temporary setups at events like health fairs or conventions, which can operate both within and outside the franchisee's territory.
Furthermore, Dermani Medspa retains the right to engage in other business activities, such as direct marketing, internet sales, or wholesale operations, without regard to the franchisee's territory. They can also acquire or be acquired by businesses that compete with Dermani Medspa, potentially leading to increased competition within or near a franchisee's territory. While Dermani Medspa states that they will not establish new competing businesses under the Dermani Medspa marks or the acquired chain's marks in the franchisee's territory if they acquire a competing business, they may rebrand existing businesses in the territory to use the Dermani Medspa marks and system.
For a prospective franchisee, this highlights the importance of understanding the specific territory granted and the potential for competition from various sources, including the franchisor itself. The franchisee should carefully evaluate the market and competitive landscape before investing in a Dermani Medspa franchise, recognizing that the franchisor retains considerable flexibility in expanding the brand's presence through different channels and locations.