What specific professional services are covered by the Dermani Medspa Practice's restrictive covenant?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement, Practice shall not directly or indirectly, through an affiliate (which shall not include independent contractor physicians of Practice) or otherwise, without the prior written consent of Manager, which consent may be withheld by Manager in its sole discretion, acquire, establish, operate, manage, control, own (debt or equity, but excluding ownership of less than five percent of the equity of any publicly traded entity), or maintain any other interest in, in any such case within the United States: (a) any entity or enterprise, other than Practice, that provides the Professional Services; (b) any entity or enterprise that provides administrative, operational and non-professional services to Practitioners or offers any type of services or products similar to those that Manager offers; or (c) any health maintenance organization, preferred provider organization, exclusive provider organization, or similar entity or organization.
Furthermore, upon the termination or expiration of this Agreement, the Practice shall not, for a period of two (2) years, acquire, establish, operate, manage, control, own (debt or equity, but excluding ownership of less than five percent of the equity of any publicly
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa FDD, the Practice Restrictive Covenant outlines specific limitations on the Practice's activities during the agreement term. The Practice is restricted from directly or indirectly engaging in certain activities without the Manager's prior written consent. These restrictions apply to any entity or enterprise within the United States.
Specifically, the Practice cannot be involved with any entity, other than the Practice itself, that provides Professional Services. This encompasses a broad range of services that would directly compete with Dermani Medspa. Additionally, the Practice is prohibited from engaging with any entity that offers administrative, operational, and non-professional services to Practitioners, or any services or products similar to those offered by the Manager. This prevents the Practice from supporting or being involved in businesses that could undermine the Manager's role or offerings.
Furthermore, the Practice is restricted from involvement with any health maintenance organization, preferred provider organization, exclusive provider organization, or similar entity or organization. This clause ensures that the Practice remains focused on the Dermani Medspa business model and does not divert resources or attention to other healthcare-related ventures that could compete with or dilute the brand's focus. Upon termination or expiration of the agreement, these restrictions continue for a period of two years, limiting the Practice's ability to engage in similar activities for a defined period after the agreement ends.
These covenants are designed to protect Dermani Medspa's market position and prevent franchisees from using the knowledge and resources gained during the franchise agreement to directly compete with the brand, either during the term or immediately after its conclusion. Prospective franchisees should carefully consider these restrictions and how they might impact their future business opportunities.