What happens to the Dermani Medspa Guarantee upon the death of an individual guarantor?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
This Guarantee shall terminate upon the termination or expiration of the Agreement, except that all obligations and liabilities of the undersigned which arose from events which occurred on or before the effective date of such termination shall remain in full force and effect until satisfied or discharged by the undersigned, and all covenants which by their terms continue in force after the expiration or termination of the Agreement shall remain in force according to their terms. Upon the death of an individual guarantor, the estate of such guarantor shall be bound by this Guarantee, but only for defaults and obligations hereunder existing at the time of death; and the obligations of the other guarantors will continue in full force and effect.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the death of an individual guarantor does not automatically terminate the guarantee. Instead, the guarantor's estate becomes responsible for the guarantee, but only for defaults and obligations that existed at the time of death. This means that the estate will be liable for any outstanding debts or unfulfilled responsibilities that the guarantor had before passing away.
This provision ensures that Dermani Medspa is protected even if a guarantor dies. The estate steps into the guarantor's shoes to cover any existing liabilities. However, the estate is not responsible for any new obligations that arise after the guarantor's death. This limits the estate's exposure to the guarantor's existing commitments.
Furthermore, the FDD specifies that if there are other guarantors, their obligations will remain in full force and effect. This means that the death of one guarantor does not release the other guarantors from their responsibilities. Dermani Medspa retains the full protection of the guarantee from the remaining guarantors.
For a prospective Dermani Medspa franchisee, this clause highlights the importance of understanding the full scope of the guarantee and its implications for both individual guarantors and their estates. It also underscores the need to carefully consider the financial capacity and potential liabilities of any individuals who agree to act as guarantors.