What liabilities does the transferor retain to Dermani Medspa after the franchise transfer?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
7.3.6. The transferor shall remain liable for all of the obligations to us in connection with this Agreement that arose prior to the effective date of the transfer, and any covenants that survive the termination or expiration of this Agreement, and shall execute any and all instruments reasonably requested by us to evidence such liability.
12.3.1. You must submit a written request to us for any proposed transfer under this Agreement. If you are in full compliance with this Agreement, including our policies and System Standards, then we will not unreasonably withhold our consent to a transfer that meets all of the requirements in this Section. For any proposed transfer, all of the following conditions must be met before or concurrently with the effective date of the transfer:
- (g) The transferor shall remain liable for all of the obligations to us in connection with the Franchised Business incurred prior to the effective date of the transfer and shall execute any and all instruments reasonably requested by us to evidence such liability;
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, a transferor remains liable for all obligations to Dermani Medspa that arose before the effective date of the transfer. The transferor must also execute any instruments reasonably requested by Dermani Medspa to evidence this liability. This means that if the franchisee had existing debts, outstanding fees, or failed to meet other contractual obligations before the transfer, they remain responsible for resolving these issues even after the franchise is sold.
This condition protects Dermani Medspa by ensuring that prior financial or contractual breaches are not simply erased by the transfer of ownership. It also motivates franchisees to maintain their business in good standing to facilitate a smoother transfer process. The new franchisee is not burdened with the previous owner's debts or unresolved issues.
For a prospective Dermani Medspa franchisee looking to sell their business, it's crucial to ensure all financial and contractual obligations are met before initiating the transfer. Failure to do so could result in ongoing liability even after the sale is complete. This could include settling any outstanding royalty fees, marketing fees, or resolving any disputes with third-party vendors.