What liability does the transferor retain after transferring a Dermani Medspa franchise?

According to Dermani Medspa's 2025 Franchise Disclosure Document, a transferor remains liable for all obligations to Dermani Medspa that arose prior to the effective date of the transfer. This includes any covenants that survive the termination or expiration of the Franchise Agreement. The transferor must also execute any instruments reasonably requested by Dermani Medspa to evidence this liability. This condition is further supported by the requirement that, prior to transfer, the franchisee must be in full compliance with the agreement, including policies and system standards, and must have paid all Royalty Fees, System Marketing Fees, and other amounts owed to Dermani Medspa and third-party vendors.

This means that if a Dermani Medspa franchisee sells their franchise, they are still responsible for any outstanding debts, fees, or other obligations that they incurred during their time as a franchisee. For example, if the franchisee owes unpaid royalties or has failed to pay vendors before the transfer date, they remain liable for those amounts even after the franchise has been sold to a new owner. This ensures that Dermani Medspa is protected from financial losses due to franchisee transfers.

For a prospective Dermani Medspa franchisee, this highlights the importance of maintaining good financial standing and fulfilling all contractual obligations throughout the term of the franchise agreement. Before considering a transfer, franchisees should ensure that all outstanding debts and obligations are resolved to avoid future liability. This also underscores the need for careful record-keeping and transparent communication with Dermani Medspa regarding any financial matters.