Under the Dermani Medspa franchise agreement, what events are included in the definition of a 'transfer'?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2.2. In this Agreement, the term "transfer" includes a voluntary or involuntary, direct or indirect, assignment, sale, gift, or other disposition. An assignment, sale, gift, or other disposition includes the following events:
- a) transfer of ownership of capital stock, a partnership or membership interest, or another form of ownership interest;
- b) merger or consolidation or issuance of additional securities or other forms of ownership interest;
- c) any sale of a security convertible to an ownership interest;
- d) transfer of an interest in you, this Agreement, any Franchise Agreement(s), the Franchised Business(es), or substantially all of your assets, or your owners in a divorce, insolvency, or entity dissolution proceeding or otherwise by operation of law; or
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to the 2025 Dermani Medspa Franchise Disclosure Document, the term 'transfer' is broadly defined and includes various scenarios where ownership or control of the franchise changes. This definition is important because Dermani Medspa must approve any transfer, and specific conditions must be met.
The term 'transfer' encompasses both voluntary and involuntary actions, whether direct or indirect. Specifically, it includes assignments, sales, gifts, or any other form of disposition of the franchise or its assets. This broad definition ensures that any change in ownership or control is subject to the franchisor's approval.
Several specific events are explicitly listed as transfers. These include the transfer of ownership of capital stock, partnership or membership interests, or any other form of ownership interest in the franchise. Mergers, consolidations, or the issuance of additional securities that could alter ownership are also considered transfers. Furthermore, the sale of any security that is convertible to an ownership interest falls under this definition. Finally, transfers of interest due to divorce, insolvency, entity dissolution, or by operation of law are also included, ensuring that unforeseen circumstances leading to a change in ownership are covered under the transfer provisions.
For a prospective Dermani Medspa franchisee, this means that any plan to sell the franchise, bring in a partner, or even alter the ownership structure of their business entity will require franchisor approval. Failing to obtain this approval could result in a breach of the franchise agreement. The franchisee should carefully consider these restrictions and discuss any potential future changes with Dermani Medspa to ensure compliance.