Under what conditions will the length of the non-compete period for a Dermani Medspa franchisee be extended?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
9.1.5. Upon termination, transfer, or expiration of this Agreement you agree that, for two (2) years beginning on the later of (i) the effective date of termination, transfer, or expiration, or (ii) the date on which all persons restricted by this Section 9.2 begin to comply with this Section 9.2, or (iii) if litigation is necessary to enforce this Agreement, the date of entry of an order by a court of competent jurisdiction enforcing this Agreement: you and your immediate family members, for yourself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, limited liability company, or other entity, will not own, maintain, operate, engage in, manage, franchise or license, or have any direct or indirect controlling or non-controlling interest as an owner (whether of record, beneficially, or otherwise) or be or perform services as a partner, director, manager, employee, consultant, representative, or agent in any Competitive Business, that is, or is intended to be, located within the Development Area, or within a five (5) mile radius of the boarder of the Development Area or any other dermani MEDSPA® operating at the time the obligations under this Section 8.2 commence, except as permitted by any franchise agreements that remain in effect between you and us. You agree that the length of time in this Section 9.2 will be tolled for any period during which you are in breach of the covenants set forth in this Section 9.2, or any other period during which we seek to enforce this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa FDD, the non-compete period can be extended under specific circumstances related to breaches of the franchise agreement or enforcement actions.
Specifically, the standard two-year non-compete period that begins after the termination, transfer, or expiration of the Franchise Agreement can be extended. The two-year period is calculated from the later of (1) the effective date of termination, transfer, or expiration, (2) the date on which all persons restricted by this section begin to comply with the non-compete obligations, or (3) the date of entry of a court order enforcing the agreement if litigation is necessary.
The agreement states that the length of the non-compete period will be extended (tolled) for any period during which the franchisee is in breach of the covenants within the non-compete section or any other period during which Dermani Medspa seeks to enforce the agreement. This means that if a franchisee violates the non-compete terms, the two-year clock stops running during the violation and any legal proceedings, effectively prolonging the period during which the franchisee is restricted from engaging in competitive activities.