Under what circumstances will a Dermani Medspa franchisee be responsible for audit, accounting, and legal costs?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 5% of Gross Revenue | Each Week, on or before the Wednesday of each week calculated on the Gross Revenue for the prior Week | See Note 2 for the definition of “Gross Revenue” and “Week.” |
| System Marketing Fee | Up to 2% of Gross Revenue, currently 0.25% | Same as Royalty | See Note3. |
| Local Advertising Spend | $500 each month | Monthly | This is the minimum amount that you must spend each month on local advertising and marketing. The actual amount needed for you to spend on local marketing each month may be significantly higher than this amount. You will pay this amount to various third parties, not us. We may recommend and/or require you to spend such local marketing expenditures in certain ways. |
| Social Media/ Technology Fee | Our then- current Social Media/ Technology Fee, currently $300 per month (See Note 4) | Monthly | We reserve the right to increase the Social Media/Technology Fee by no more than twenty percent (20%) each year, which in any event the maximum required Social Media/Technology Fee shall not exceed $500 each month. |
| Type of Fee | Amount | Due Date | Remarks |
| (Note 1) | |||
| Non- Compliance with System Standards | Our then- current fee, which may vary depending upon the specific required policy you violate | As incurred | Not including any monetary defaults, we may charge you our then-current non-compliance fee (which will not exceed $500 per violation), as set forth in the Manual or otherwise, in the event you fail to fully comply with any of our then- required System Standards (as that term is defined in Item 8) |
| OSHA Compliance Fee | Our costs and expenses, currently $150/month | Monthly | We may require you to pay this fee to us or directly to our designated approved supplier that will evaluate your Franchised Business and Medspa for compliance with OSHA. |
| Type of Fee | Amount | Due Date | Remarks |
| (Note 1) | the audit, reasonable accounting and legal costs | underpay your royalties by 2% or more. You will also have to pay interest and late fees on the underpayment. |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, a franchisee may incur audit, accounting, and legal costs under specific circumstances related to royalty payments and defaults under the Franchise Agreement. If a Dermani Medspa franchisee underpays their royalties by 2% or more, they will be responsible for the audit, reasonable accounting, and legal costs associated with determining the underpayment. Additionally, they will be required to pay interest and late fees on the underpaid amount.
Furthermore, if a Dermani Medspa franchisee defaults under the Franchise Agreement, they must reimburse Dermani Medspa for all expenses incurred as a result of the default. These expenses include reasonable attorneys' fees necessary to enforce and terminate the agreement. This provision ensures that Dermani Medspa can recover costs associated with addressing a franchisee's failure to meet their contractual obligations.
Another instance where a Dermani Medspa franchisee may be responsible for legal costs is related to indemnification. If Dermani Medspa is sued or held liable in any case connected to the franchisee's business operations, the franchisee must indemnify Dermani Medspa and reimburse them for all costs, including attorneys' fees. This protects Dermani Medspa from liabilities arising from the franchisee's actions or business activities.