Can Dermani Medspa be the sole approved supplier of any product or service for Dermani Medspa franchisees?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
You must buy all products, supplies, equipment, materials, services, and other products used or offered for sale at the dermani MEDSPA® only from suppliers (including manufacturers, distributors, and other sources) that meet our specifications in the Manuals and/or that we have approved in writing. You may not buy from any supplier that we have not yet approved in writing, and you must stop buying from any supplier who we approve, but later disapprove. We have the right to designate only one manufacturer, distributor, reseller and/or vendor for any particular item or service. We may be a supplier of any product or service, and we may be the sole approved supplier of any product or service.
The types of products and services that you must purchase or use from approved suppliers, designated sources, us or an affiliate, or according to our specifications, include (among other things): dermani MEDSPA® design and image items, such as décor, color schemes, signs, fixtures, and furniture;
POS; medical equipment and supplies; computer hardware, software, and other technology platforms; mobile applications and programs; email addresses and hosting platforms; Online Management Services; construction contractors; real estate brokers; bookkeeping and accounting services; membership programs; insurance coverage; and retail products to be sold at the dermani MEDSPA®.
You must use our designated real estate broker to either be your real estate broker, or, if you elect to use your own real estate broker, then you must use our real estate broker to oversee your site selection process. If you use your own real estate broker, then you must still pay our designated broker their thencurrent fee in connection with providing their oversight services. Likewise, you must use our designated construction contractor to either be your contractor, or, if you elect to use your own contractor, then you must use our contractor to oversee your buildout. If you use your own contractor, then you must still pay our designated contractor their then-current fee in connection with providing their oversight services. We reserve the right to approve your real estate broker and construction contractor.
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 be the sole approved supplier of any product or service for its franchisees. The FDD specifies that franchisees must purchase products, supplies, equipment, materials, and services only from suppliers that meet Dermani Medspa's standards or have been approved in writing. Dermani Medspa retains the right to designate a single supplier for any particular item or service.
This requirement has significant implications for prospective franchisees. It means that franchisees may not have the freedom to choose suppliers based on price, quality, or other factors. Instead, they must adhere to Dermani Medspa's approved supplier list, potentially limiting their options and potentially impacting their profit margins. While this ensures consistency and quality control across the Dermani Medspa system, it also reduces the franchisee's autonomy in procurement decisions.
The FDD also states that purchases from approved suppliers or according to Dermani Medspa's specifications will represent approximately 65% to 85% of the franchisee's total purchases during the establishment phase and 75% to 95% during the ongoing operation of the Dermani Medspa. This indicates a substantial reliance on approved suppliers, further emphasizing the importance of understanding the terms and conditions associated with these supplier relationships. Franchisees are also obligated to use Dermani Medspa's designated real estate broker and construction contractor, or pay them an oversight fee if they choose to use their own.
Furthermore, if a franchisee wishes to use a non-approved product or supplier, they must seek written approval from Dermani Medspa and may incur evaluation fees and costs for testing and inspection. Dermani Medspa reserves the right to re-inspect approved suppliers and revoke approval if they fail to meet current standards. Dermani Medspa also has the right to collect and retain any allowances, rebates, credits, incentives, or benefits from suppliers based on the franchisee's purchases. This could impact the franchisee's potential cost savings and overall profitability.