What minimum business interruption insurance coverage, including coverage for continuing fees, is required for a Dermani Medspa franchise?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.6.2. Your insurance coverage must be maintained during the term of the Franchise Agreement and must be obtained from a responsible, duly licensed carrier or carriers acceptable to us and having a rating of at least "A" with A.M. Best Company. Currently you must maintain the following insurance:
- (a) business interruption insurance covering a minimum of twelve (12) months of income, including coverage for our continuing fees, and with us named as a loss payee with respect to our continuing fees;
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, franchisees must maintain business interruption insurance. This insurance must cover a minimum of twelve months of income and include coverage for Dermani Medspa's continuing fees. Dermani Medspa must also be named as a loss payee regarding these continuing fees.
This requirement ensures that Dermani Medspa franchisees can continue to meet their financial obligations, particularly the ongoing fees owed to the franchisor, even if their business operations are temporarily disrupted. This protects the franchisor's revenue stream and helps maintain the stability of the franchise system. The policy must name Dermani Medspa as a loss payee, ensuring they receive direct compensation for their continuing fees in the event of a covered business interruption.
Franchisees should carefully review their insurance policies to confirm that they meet these specific requirements. They should also understand the terms and conditions of their business interruption coverage, including what events are covered and how claims are processed. It is also important to note that Dermani Medspa can periodically increase the amounts of coverage required and/or require different or additional insurance coverage at any time.