What is the limitation on the recovery of damages in a dispute between Dermani Medspa and the franchisee?
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
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, franchisees agree to indemnify and hold harmless the franchisor group against any losses, liabilities, expenses, or damages, including attorney's fees and court costs, resulting from claims by customers or third parties related to the franchise agreement or franchised business. This indemnification extends to actions occurring before the effective date of the agreement.
Specifically, franchisees are responsible for defending and reimbursing the franchisor for all claims, obligations, and damages arising from the operation of the franchised business or any breach of the agreement. However, this obligation does not apply if the claims, obligations, or damages are determined to be caused solely by the franchisor's gross negligence or willful misconduct, as decided by a court of law. The franchisor has the right to designate the attorneys for defending any claims, and this indemnification remains in effect even after the agreement expires or terminates.
The franchisee is responsible for covering all claims, including accountants', attorneys', and expert witness fees, costs of investigation, proof of facts, court costs, travel and living expenses, and other expenses of litigation or alternative dispute resolution. This means that franchisees could face significant financial burdens in the event of legal disputes or claims related to their Dermani Medspa business, unless the franchisor is found to be grossly negligent or guilty of willful misconduct. Franchisees should be aware of these extensive indemnification obligations and consider the potential financial risks involved.