Under what circumstances can Dermani Medspa refuse to execute a Successor Franchise Agreement?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
Refusal to Execute Successor Franchise Agreement.** We can refuse to execute any Successor Franchise Agreement with you if your lease, sublease or other document by which you have the right to occupy the Premises is not extended before your successor term is to take effect to cover the period of the successor term or if you do not have a written commitment from your landlord to renew the lease or sublease for a period at least equal to the successor term.
We may also refuse to execute any Successor Franchise Agreement with you under other circumstances, including, but not limited to, your failure to substantially comply with the terms of this Agreement, your failure to pay amounts owed to us when due, or your failure to cure of any defaults incurred during the initial term of this Agreement, if applicable.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, Dermani Medspa has the right to refuse to execute a Successor Franchise Agreement under specific conditions. These conditions include situations where the franchisee's lease or sublease for the premises isn't extended to cover the successor term, or if the franchisee doesn't have a written commitment from the landlord to renew the lease for a period at least equal to the successor term. This means that securing the location for the long term is critical for a franchisee seeking renewal.
Additionally, Dermani Medspa can refuse to execute a Successor Franchise Agreement if the franchisee fails to substantially comply with the terms of the existing agreement, fails to pay amounts owed to Dermani Medspa when due, or fails to cure any defaults incurred during the initial term of the agreement. These stipulations highlight the importance of maintaining a good standing relationship with the franchisor and adhering to all contractual obligations.
However, the FDD also notes that even if Dermani Medspa declines to grant a successor term, a law, rule, regulation, statute, ordinance, or legal order might require them to do so. In such cases, the successor term would be subject to the conditions of the then-current franchise agreement being used for new franchisees or, if Dermani Medspa is not offering new franchises, the terms in the then-current franchise agreement that Dermani Medspa indicates. This clause provides a potential safeguard for franchisees, although the terms of the renewal might not be as favorable as the original agreement.