What happens if a Dermani Medspa franchisee fails to maintain the required insurance?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
The insurance policies must provide for thirty (30) days' prior written notice to us of a policy's material modification, cancellation or expiration. You must routinely furnish us copies of your certificates of insurance or other evidence of your maintaining this insurance coverage and payment of premiums, including without limitation, completed policy endorsements. If you fail or refuse to obtain and maintain the insurance we specify, in addition to our other remedies, we may obtain comparable insurance for you and the Franchised Business on your behalf, in which event you shall cooperate with us and reimburse us for all premiums, costs and expenses we incur in obtaining and maintaining the insurance, plus a ten percent (10%) administrative
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 coverage throughout the term of the Franchise Agreement. If a franchisee fails to obtain and maintain the insurance coverage that Dermani Medspa specifies, Dermani Medspa has the right to obtain comparable insurance on behalf of the franchisee's business.
In such a case, the franchisee is obligated to cooperate with Dermani Medspa and reimburse them for all premiums, costs, and expenses incurred in obtaining and maintaining the insurance. In addition to reimbursing Dermani Medspa for the insurance costs, the franchisee must also pay a ten percent (10%) administrative fee to Dermani Medspa for the time spent obtaining the insurance.
Furthermore, failure to maintain the required insurance constitutes a default under the Franchise Agreement. According to section 14.2.9, if the franchisee fails to maintain the required insurance or fails to repay Dermani Medspa for insurance paid on their behalf, and does not correct the failure within thirty (30) days after written notice, Dermani Medspa may have grounds to terminate the franchise agreement.