Who must be included in the general release required for a Dermani Medspa franchise transfer?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
MEDSPA®. The Franchisee Group further indemnifies and holds the Franchisor Group harmless against, and agrees to reimburse them for any loss, liability, expense, or damages (actual or consequential)
including, without limitation, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, and other litigation and travel and living expenses, which any member of the Franchisor Group may suffer with respect to any claims or causes of action which any customer, creditor, or other third party now has, ever had, or hereafter would or could have, as a result of, arising from, or under the Franchise [Development] Agreement, the Franchised Business, or the dermani MEDSPA®, but only to the extent such liability relates to actions occurring prior to the Effective Date. The Franchisee Group and its owners represent and warrant that they have not made an assignment or any other transfer of any interest in the claims, causes of action, suits, debts, agreements, or promises described herein.
[Note for California Release – add the following:
Except as set forth herein, Franchisee Group expressly relieves and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California ("Section 1542"), and does so understanding and acknowledging the significance and consequence of such specific waiver of Section 1542. Section 1542 states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH EITHER PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AS OF THE DATE OF EXECUTION OF THIS AGREEMENT, WHICH IF KNOWN BY SUCH PARTY WOULD HAVE MATERIALLY AFFECTED THE TERMS OF THE AGREEMENT."
Notwithstanding the provisions of Section 1542, and for the purpose of implementing the general release and discharges described in this paragraph, Franchisee Group expressly acknowledges that this Release is intended to include in its effect without limitation, all claims described in this paragraph which Franchisee Group does not know or suspect to exist in its favor at the time of execution hereof, and that this Release contemplates the extinguishment of any such claims.]
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the "Franchisee Group" must provide a general release during a franchise transfer. The Franchisee Group also agrees to indemnify and hold the Franchisor Group harmless. They must reimburse them for any loss, liability, expense, or damages including reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, and other litigation and travel and living expenses. This covers claims or causes of action from customers, creditors, or other third parties related to the Franchise Agreement, the Franchised Business, or the dermani MEDSPA®, but only to the extent such liability relates to actions occurring prior to the Effective Date. The Franchisee Group and its owners must also represent and warrant that they have not made an assignment or any other transfer of any interest in the claims, causes of action, suits, debts, agreements, or promises described herein.
For California releases, the Franchisee Group must acknowledge they are relinquishing rights and benefits afforded by Section 1542 of the Civil Code of the State of California. This section states that a general release does not extend to claims unknown or unsuspected at the time of the agreement, which, if known, would have materially affected the terms. The Franchisee Group must expressly acknowledge that the release includes all claims, even those unknown or unsuspected, at the time of execution.
This requirement ensures that Dermani Medspa is protected from potential liabilities arising from the franchisee's prior actions. Prospective franchisees should carefully review this section with legal counsel to understand the full scope of the release and indemnification obligations before transferring a franchise.