Who has the sole discretion in how the Dermani Medspa System Marketing Fund is used?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
We have established and currently maintain a System Marketing Fund for the enhancement and protection of the dermani MEDSPA® brand and Marks. You will be required to pay a System Marketing Fee each Week in an amount we specify up to 2% of your Gross Revenue, and we or our designee will maintain and administer the System Marketing Fund as follows (Franchise Agreement, Section 9.2):
The System Marketing Fund, all contributions thereto and any earnings from the System Marketing Fund shall be used exclusively (except as otherwise provided below), in our sole discretion, to meet any and all costs of maintaining, administering, directing, conducting, creating and/or otherwise preparing advertising, marketing, public relations and/or promotional programs and materials, and any other activities which we believe will enhance the image of the System, including, without limitation, the costs of preparing and/or conducting: media advertising campaigns; social media and search campaigns; direct mail advertising; marketing surveys and other public relations activities; employing advertising and/or public relations agencies to assist therein; brand research and development; developing and hosting marketing, brand development and enhancement, and customer engagement seminars for franchisees; purchasing promotional items; developing new or modified trade dress and marks; point-of-purchase (POP) materials; design and photographs; conducting and administering visual merchandising, and other merchandising programs; purchasing media space or time (including all associated fees and expenses); administering regional and multi-regional marketing and advertising programs; market research and customer satisfaction surveys; developing and implementing customer membership, loyalty and gift card programs; customer retention programs; customer surveys and mystery shopper programs; the creative development of, and actual production associated with, premium items, giveaways, promotions, contests, public relation events, and charitable or non-profit events; developing, implementing and maintaining an electronic commerce website and/or related strategies; maintaining and developing one or more Websites devoted to the System, the Proprietary Marks and/or the "dermani MEDSPA®®" brand; and providing promotional and other marketing materials and services to the Franchised Businesses or dermani MEDSPA®s operated under the System.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 31–43)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa Franchise Disclosure Document, Dermani Medspa has sole discretion in how the System Marketing Fund is used. The funds are to be used to enhance and protect the Dermani Medspa brand and marks. Franchisees are required to pay a System Marketing Fee each week, up to 2% of their gross revenue.
Dermani Medspa details a variety of potential uses for the System Marketing Fund, including media advertising campaigns, social media and search campaigns, direct mail advertising, marketing surveys, brand research and development, and the development of websites. The funds may also cover the costs of employing advertising agencies, purchasing promotional items, and conducting visual merchandising programs. Dermani Medspa also specifies that the System Marketing Fund can be used to provide rebates or reimbursements to franchisees for local expenditures on products, services, or improvements, provided that Dermani Medspa has approved these in advance.
While Dermani Medspa retains control over the System Marketing Fund, the document states that the funds will be accounted for separately from Dermani Medspa's other monies and will not be used for general operating expenses. The funds can be used to cover administrative costs of the System Marketing Fund, including salaries and benefits of personnel who manage the fund. Dermani Medspa emphasizes that it does not owe any fiduciary obligation to franchisees for administering the System Marketing Fund.
Prospective franchisees should note that Dermani Medspa does not guarantee that System Marketing Fund expenditures will be made in or affect any specific geographic area, or will be proportionate or equivalent to System Marketing Fund contributions by Franchised Businesses operating in that geographic area. Dermani Medspa also has the right to terminate the System Marketing Fund at any time, though it will not be terminated until all monies in the fund have been spent.