Does Dermani Medspa have a right of first refusal if a Dermani Medspa franchisee decides to sell their business?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| to you and without restriction. | ||
| k. “Transfer” by you – defined | Section 12.2 | Includes any sale, assignment, gift, conveyance, pledge, mortgage or other encumbrance or disposition of any interest in the Franchise Agreement, the Franchised Business or you (if you are not a natural person). |
| l. Our approval of transfer by you | Section 12.3 | You may not transfer the Franchise Agreement without our prior written consent. We will not unreasonably withhold our consent. Our consent to a transfer is not a waiver of any claims we have against you. |
| m. Conditions for our approval of transfer | Section 12.3 | Your full compliance with the Franchise Agreement; our approval of transferee; you are current in fees owed to us; transferee signs then-current franchise agreement; payment of transfer fee; release signed; you comply with non-competition covenants; all obligations to us satisfied; and others. |
| n. Our right of first | Section 12.6 | We have the right of first refusal if you determine to sell |
| refusal to acquire your | or transfer your interest in the franchisee, the Franchise | |
| business | Agreement or the Franchised Business. | |
| o. Our option to purchase your business | Section 15.5 | Upon termination or expiration of the Franchise Agreement, we have the right to purchase all or a portion of the assets of your Franchised Business at their fair market value. |
| p. Your death or disability | Section 12.5 | Your estate must transfer your interest in the Franchised Business to a third party we approve within 12 months after death or disability. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 51–58)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, Dermani Medspa does retain a right of first refusal if a franchisee decides to sell their business. Specifically, Section 12.6 of the Franchise Agreement grants Dermani Medspa the right of first refusal if a franchisee intends to sell or transfer their interest in the franchise, the Franchise Agreement, or the Franchised Business. This means that before a franchisee can sell to a third party, they must first offer the business to Dermani Medspa under the same terms and conditions.
Additionally, Section 7.7 of the Area Development Agreement also grants Dermani Medspa a right of first option. If a franchisee or one of their owners plans to sell or transfer any material asset of the business or any material part (which changes control) of the entity which owns the business to a third party, the franchisee and/or the owner must first offer the assets or interest to Dermani Medspa under the same terms and conditions. If Dermani Medspa declines to acquire the assets or interest, the franchisee and/or the owner may then transfer them to the third party.
This right of first refusal is a common provision in franchise agreements, allowing Dermani Medspa to maintain control over who enters their system and to potentially expand their corporate-owned operations. For a prospective franchisee, this means that selling the business may involve an extra step of offering it to Dermani Medspa first, which could potentially delay or complicate the sale process. However, if Dermani Medspa declines, the franchisee is free to sell to another buyer. It is important for franchisees to understand the implications of this clause when considering selling their Dermani Medspa franchise.