Can Dermani Medspa modify the Development Area if the franchisee defaults?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
quitable interest, in their revenue, profits, rights or assets. The Owner(s) are identified on Exhibit C.
"Person" – any natural person, corporation, limited liability company, general or limited partnership, unincorporated association, cooperative, or other legal or functional entity.
"Premises" – the location that we approve for the dermani MEDSPA®.
"System Standards" – the mandatory and suggested specifications, standards, operating procedures and rules that we prescribe for the management and operation of the Franchised Business and dermani MEDSPA®.
The definitions provided above are in addition to other defined terms set forth in this Agreement.
1. GRANT OF DEVELOPMENT RIGHTS; TERRITORY
- 1.1. Grant of Development Rights. Pursuant to the terms and conditions of this Agreement, we hereby grant to you the right, and you accept the obligation, to develop a specified number of Franchised Businesses in the Development Area, as set forth Exhibit A attached hereto. In this regard, you further agree:
- 1.1.1. To develop the Franchised Businesses and dermani MEDSPA®s pursuant to the development schedule set forth in Paragraph 3 of Exhibit A attached hereto (the "Development Schedule"). If at any time during the term of this Agreement you fail to satisfy the Development Schedule, then we have the right, but not the obligation, to exercise our termination rights and other rights pursuant to Section 8 below;
- 1.1.2. that each dermani MEDSPA® developed under this Agreement must be established and managed by a Franchised Business pursuant to a separate dermani MEDSPA® Franchise Agreement (a "Franchise Agreement") that must be executed as provided in Section 3.1 below; and
- 1.1.3. that each Franchised Businesses and dermani MEDSPA® developed under this Agreement must be located within the area that is specified in Paragraph 2 of Exhibit A, attached hereto (the "Development Area").
- 1.2. No Protections to Development Area. Your rights within the Development Area are nonexclusive, and we may award the same Development Area to multiple area developers. However, we will not sell the right to develop more dermani MEDSPA®s than the total number of available territories available in the Development Area.
- 1.3. Rights we Reserve.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, if a franchisee fails to meet the development schedule outlined in Exhibit A of the Area Development Agreement, Dermani Medspa has the right, but not the obligation, to exercise termination rights. The development schedule specifies the number of Dermani Medspa locations the franchisee is obligated to develop within the Development Area.
Specifically, the franchisee is obligated to develop Franchised Businesses according to the development schedule in Paragraph 3 of Exhibit A. Each Dermani Medspa must be established and managed by a Franchised Business under a separate Franchise Agreement. These Franchised Businesses must be located within the Development Area specified in Paragraph 2 of Exhibit A.
However, the FDD states that the franchisee's rights within the Development Area are nonexclusive, and Dermani Medspa may award the same Development Area to multiple area developers. Dermani Medspa retains all rights concerning Franchised Businesses, the System, the Marks, and the sale of services, allowing them to operate as they deem appropriate. If any rights, options, arrangements, or areas are terminated or modified, it will not prejudice Dermani Medspa's right to terminate the agreement, retain development fees, or terminate other rights due to the same or additional defaults.