Does the indemnification obligation for Dermani Medspa franchisees continue even after the franchise agreement expires or terminates?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3.1. You agree to indemnify, defend, and hold harmless the Indemnified Parties against, and to reimburse any one or more of the Indemnified Parties for, all claims, obligations, and damages directly or indirectly arising out of the Franchised Business's operation and/or any operations of the dermani MEDSPA®s you manage, the business you conduct under this Agreement, or your breach of this Agreement, unless the claims, obligations, or damages are determined to be caused solely by our gross negligence or willful misconduct in a final, unappealable ruling issued by a court of competent jurisdiction.
- 11.3.2. Each Indemnified Party may defend any claim against it at your expense and agree to settlements or take any other remedial, corrective, or other actions. We have the right to designate attorneys that you must retain to defend any claims subject to this indemnification provision. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination.
- 11.3.3. An Indemnified Party need not seek recovery from any insurer or other third party, or otherwise mitigate their losses and expenses, in order to maintain and recover fully a claim against you under this subparagraph. You agree that a failure to pursue a recovery or
mitigate a loss will not reduce or alter the amounts that an Indemnified Party may recover from you under this subparagraph.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the franchisee's obligation to indemnify Dermani Medspa continues even after the franchise agreement expires or terminates. Specifically, the franchisee agrees to indemnify, defend, and hold harmless Dermani Medspa against all claims, obligations, and damages arising from the operation of the franchised business, any Dermani Medspa locations managed by the franchisee, the franchisee's business conduct under the agreement, or any breach of the agreement by the franchisee. This indemnification extends to covering the expenses Dermani Medspa incurs in defending against any claims.
The indemnification obligation survives the termination or expiration of the franchise agreement. This means that even after the agreement ends, the franchisee remains responsible for any claims or damages that arise from their past operation of the Dermani Medspa franchise. Dermani Medspa is not obligated to seek recovery from any insurer or mitigate their losses before seeking indemnification from the franchisee.
This extended liability is a significant consideration for prospective Dermani Medspa franchisees. It is essential to understand that potential liabilities related to the business can persist even after the franchise is no longer operating. Franchisees should carefully assess the risks associated with the business and ensure they have adequate insurance coverage to protect themselves against potential claims. Furthermore, franchisees should maintain thorough records of their business operations and compliance with the franchise agreement to defend against any future claims.