If Dermani Medspa is acquired by a competing business, can that business establish competitive franchises in the Dermani Medspa Development Area?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.3.3. 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 that 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
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, Dermani Medspa retains the right to be acquired by a competing medical business or medical management business. If Dermani Medspa is acquired, the competing business may establish or grant franchises or licenses to establish new or additional businesses, even if such business operates, franchises, and/or licenses competitive businesses in the Development Area. This means that a Dermani Medspa franchisee's territory could potentially face competition from a competing franchise system if Dermani Medspa is acquired by that competitor.
This clause highlights a potential risk for franchisees. While franchisees are granted development rights within a specific area, these rights are subject to Dermani Medspa's ability to sell the company to a competitor. The new owner would then have the right to introduce competing franchises into the franchisee's Development Area.
This type of clause is not uncommon in franchising, as franchisors need to maintain flexibility for potential business transactions. However, it is important for prospective Dermani Medspa franchisees to understand this risk and consider its potential impact on their investment. They should carefully evaluate the market potential in their Development Area and assess the likelihood of a potential acquisition by a competitor.