Does the 'Payroll Expenses' calculation for a Dermani Medspa include payments to the franchisee or Operating Principal?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
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- "Payroll Expenses" means the total amount each Company Location paid its employees in 2022 for the types of payroll expenses that a franchisee is likely to incur in operating its dermani MEDSPA®, including pay, benefits, and payroll taxes. The number and type of specific personnel varies among each Location, but generally includes 1 to 2 front desk coordinators per Company Location, 3 to 7 full-time employees ("FTE") estheticians/laser practitioners per Company Location, and 1 to 3 nurse practitioners and/or physician assistant cosmetic injectors per Company Location. Because we do not contract with a PC or management company, Payroll Expenses also includes each Company Location 's medical director's fees. Payroll Expenses does not include any amounts that you (or an Operating Principal) may pay yourself. Excluded from this line item are the payroll expenses that were incurred by a Company Location that is contributable to us as the franchisor, including, without limitation, expenses that were incurred by a Company Location in offering esthetician training and other services to the general public, as you will not be incurring such costs and expenses. As noted above, based upon applicable local laws, none of the Locations currently contract with a PC or a management company. You, as a franchisee, or your PC, will have the sole discretion to determine the number of employees and managers hired for your dermani MEDSPA®, and their hours, compensation and benefits. These figures are not requirements nor recommendations. Amounts for tips collected on behalf of the staff have been removed from Revenue and from Payroll costs.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 58–61)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the 'Payroll Expenses' calculation specifically excludes any payments to the franchisee or an Operating Principal. The FDD clarifies that 'Payroll Expenses' includes the total amount each company-owned location paid its employees in 2022 for typical payroll expenses like pay, benefits, and payroll taxes. This generally covers front desk coordinators, estheticians/laser practitioners, and nurse practitioners/physician assistant cosmetic injectors. The expenses also incorporate medical director's fees, as Dermani Medspa does not contract with a PC or management company.
This distinction is important for prospective franchisees because the financial performance representations provided in Item 19 reflect company-owned location expenses without including owner compensation. A franchisee needs to factor in their own salary or draw when projecting their potential profitability. The FDD emphasizes that franchisees have the sole discretion to determine the number of employees, their hours, compensation, and benefits, and that the figures provided are neither requirements nor recommendations.
Therefore, a potential Dermani Medspa franchisee should not assume that the 'Payroll Expenses' listed in the financial performance representations cover their own income. They must consider their desired salary and adjust their financial projections accordingly to get a more accurate picture of their potential earnings. This exclusion allows franchisees flexibility in structuring their compensation but requires careful planning to ensure the business can support both operational payroll and owner income.