Can Dermani Medspa reduce the number of future Dermani Medspa franchise agreements if the franchisee defaults?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
Recognizing that time is of the essence, you agree to satisfy each deadline set forth in the Development Schedule in Exhibit A of this Agreement. Your failure to adhere to the Development Schedule will constitute a default under this Agreement as provided in Section 8.2 below. You acknowledge and agree that the time limits and time frames set forth in and inherent in the Development Schedule, and not those in the Franchise Agreement, will govern your obligations in this Agreement.
If any of such rights, options, arrangements, or areas are terminated or modified, such action will be without prejudice to our right to terminate this Agreement, and we will have the right to retain all Development Fees paid by you, and/or to terminate any other rights or arrangements under this
Agreement at any time thereafter for the same default or as a result of any additional defaults of the terms of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa Franchise Disclosure Document, Dermani Medspa has the right to exercise termination rights if the franchisee fails to satisfy the development schedule outlined in the agreement. Specifically, if the franchisee does not meet the deadlines set forth in Exhibit A, Dermani Medspa can terminate the agreement. This means Dermani Medspa can reduce the number of franchise agreements if the franchisee defaults on their development obligations.
The development schedule is crucial, as adhering to it is a condition of the agreement. The FDD emphasizes that the time limits in the Development Schedule, not those in the Franchise Agreement, govern the franchisee's obligations. This underscores the importance of franchisees understanding and meeting these deadlines to avoid default.
Furthermore, Dermani Medspa retains the right to terminate the Area Development Agreement if any rights, options, arrangements, or areas are terminated or modified. In such cases, Dermani Medspa can retain all Development Fees paid by the franchisee and terminate any other rights or arrangements under the agreement for the same default or additional defaults. This provision gives Dermani Medspa significant power to control the pace and extent of development within a designated area.