Under what conditions is the Dermani Medspa Development Fee non-refundable?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
If any of such rights, options, arrangements, or areas are terminated or modified, such action will be without prejudice to our right to terminate this Agreement, and we will have the right to retain all Development Fees paid by you, and/or to terminate any other rights or arrangements under this
Agreement at any time thereafter for the same default or as a result of any additional defaults of the terms of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa FDD, the franchisor retains the right to keep all Development Fees paid by the franchisee if the Area Development Agreement is terminated or modified. This means that if Dermani Medspa terminates the agreement due to the franchisee's default or if the agreement is altered, the franchisee will not receive a refund of the development fees they have already paid.
This policy has significant financial implications for prospective Dermani Medspa franchisees. It highlights the importance of adhering to the terms of the Area Development Agreement to avoid potential termination and the loss of the Development Fees. Franchisees should carefully review the conditions under which Dermani Medspa can terminate the agreement and ensure they can meet those obligations.
This type of non-refundable clause is relatively common in franchising, as the franchisor incurs costs and expenses in granting the development rights and preparing to support the franchisee's development of multiple locations. However, the specific conditions and circumstances under which fees become non-refundable can vary significantly between franchise systems. Therefore, prospective franchisees should seek legal counsel to fully understand the implications of this clause in the Dermani Medspa Area Development Agreement.