What right does Dermani Medspa have regarding allowances, rebates, credits, incentives, or benefits offered by manufacturers, suppliers, and distributors based on franchisee purchases?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to collect and retain any and all allowances, rebates, credits, incentives, or benefits (collectively, "Allowances") offered by manufacturers, suppliers, and distributors to you, to us, or to our affiliates based upon your purchases of products and services from manufacturers, suppliers, and distributors. We or our affiliates will have all of your right, title, and interest in and to any and all of these Allowances. We or our affiliates may collect and retain any or all of these Allowances without restriction (unless otherwise instructed by the manufacturer, supplier, or distributor). For the fiscal year ended December 31, 2024, neither we nor our affiliates earned revenue from Allowances. We reserve the right to negotiate purchase arrangements, including price terms, with suppliers regarding various products. In doing so, we seek to promote the overall interests of our franchise system and our interests as the franchisor. Except as described in this Item 8, we do not provide any material benefits to you (such as preferential renewal rights or granting additional franchises) based on your use of designated or approved suppliers.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–28)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, Dermani Medspa has the right to collect and retain any allowances, rebates, credits, incentives, or benefits offered by manufacturers, suppliers, and distributors based on a franchisee's purchases of products and services. This means that Dermani Medspa, or its affiliates, are entitled to all rights and interests in these allowances. They can collect and retain these allowances without any restrictions, unless the manufacturer, supplier, or distributor specifies otherwise.
For a prospective franchisee, this means that any financial benefits or incentives that might arise from their purchases of products and services for their Dermani Medspa location will not directly benefit them. Instead, these benefits will accrue to Dermani Medspa or its affiliates. This is a crucial point to consider, as it affects the potential profitability and cost management of the franchise. While franchisees are responsible for the costs of purchasing supplies and services, any resulting rebates or allowances go to the franchisor.
The FDD also states that for the fiscal year ended December 31, 2024, neither Dermani Medspa nor its affiliates earned revenue from these allowances. However, Dermani Medspa reserves the right to negotiate purchase arrangements, including price terms, with suppliers to promote the overall interests of the franchise system and its own interests. This indicates that while franchisees do not directly benefit from allowances, Dermani Medspa may use its position to negotiate favorable terms that could indirectly benefit the entire franchise network.
It is important for potential franchisees to understand that Dermani Medspa does not provide any material benefits, such as preferential renewal rights or granting additional franchises, based on the franchisee's use of designated or approved suppliers, except as described elsewhere in Item 8. This reinforces the idea that the primary benefit of using approved suppliers accrues to Dermani Medspa through the collection of allowances, rather than directly to the franchisee.