Under what conditions would a Dermani Medspa franchisee be required to implement a flat administrative fee structure instead of a revenue-based fee?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
[Note: Listed below are two management fee structure options: a revenue-based fee and a flat fee. Some states, including Florida and North Carolina, have fee-splitting laws that prohibit the use of a percentage-based management fee, including the revenue-based fee formula set forth below. Other states, such as Tennessee and Georgia, allow this fee structure, but only in certain limited situations. You agree to use a revenue-based management fee structure when permitted by state and federal laws and regulations. If a revenue-based management fee is prohibited by law, You agree to implement a flat fee structure. You acknowledge that You are responsible for evaluating state law to determine whether a revenue-based management fee is permitted and assume full responsibility for compliance with any and all applicable laws and regulations.]
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the franchise agreement outlines two potential administrative fee structures: a revenue-based fee and a flat fee. The agreement stipulates that a Dermani Medspa franchisee must use a revenue-based management fee structure when permitted by state and federal laws and regulations.
However, if a revenue-based management fee is prohibited by law in a particular state, the franchisee is required to implement a flat fee structure instead. The FDD specifically mentions that some states, such as Florida and North Carolina, have fee-splitting laws that prohibit the use of percentage-based management fees, which would include the revenue-based fee formula. Other states, like Tennessee and Georgia, may allow this fee structure, but only in certain limited situations.
Ultimately, it is the franchisee's responsibility to evaluate state law to determine whether a revenue-based management fee is permitted and to ensure compliance with all applicable laws and regulations. This means a prospective Dermani Medspa franchisee needs to consult with legal counsel to understand the specific regulations in their state regarding fee structures and compliance.