dermani MEDSPA franchise unit economics — the ramp is the whole story.

dermani MEDSPA’s Item 19 discloses revenue only — no EBITDA, no payroll, no margin for franchised locations. What it does show, once you sort the 23 reporting locations by opening date, is one of the clearest maturity curves in any filing we have read. The highest-grossing franchised location did $2,491,702. The lowest did $149,208. Most of that distance is time, not talent.

The dermani MEDSPA maturity curve.

Grouping the 23 reporting locations by year opened produces a stair-step that almost nothing else in the filing explains as well.

Ten of the 23 reporting locations opened in 2024 or later, which pulls the system average down and makes the headline figure a poor benchmark for a mature location. Among locations open four or more years, the median was $1,030,739.

The company-owned comparison.

The five company locations averaged $1,698,249 against $686,494 for franchised — but all five opened between 2013 and 2017, so tenure explains much of it. A fairer comparison against the nine franchised locations open since 2022 or earlier, which averaged $1,089,013, still leaves a gap of about $609,000. All company locations sit in or around greater Atlanta.

What separates the top dermani MEDSPA performers.

This filing discloses revenue only for franchised locations, so the honest starting point is that tenure explains more of the spread here than in any other teardown on this site. Before reading anything as an operating gap, sort by open date. What remains after that is a small number of factors — and, as elsewhere, most of them are settled before opening day.

Decided before you open

• Capitalization against a three-to-four-year ramp. This is the single most consequential decision in the deal. Total estimated initial investment runs $491,792 to $906,189, and the Additional Funds line inside it covers three months — $40,000 to $80,000. The disclosed cohorts show locations averaging $374,182 in year one and not clearing $1M until year four. A location doing $374,182 is billing roughly $31,000 a month against a cost base built for far more. Three months of working capital against a thirty-six-month ramp is not an underwriting assumption; it is the gap most owners fall into.
• The PC or management agreement. Unless state law permits otherwise, you sign a franchisor-approved Management Agreement with a professional entity that employs the physicians and controls all medical services. Eight of the 23 reporting franchised locations currently contract with a PC or management company. The monetary terms are negotiable, and they sit directly between Gross Revenue and your take-home. Two owners at identical revenue can land in materially different places on this alone — and unlike a lease, there is no disclosed benchmark to compare against.
• The box you signed for. Franchised locations run 1,400 to 2,400 square feet. Rent is fixed; revenue is not. Across the five company locations rent ran 2.6% to 8.0% of revenue — about 5.5% weighted — which is a genuinely light occupancy structure for retail-adjacent space. But that ratio is a function of the numerator arriving. The same $100,000 lease is 8% of a $1.2M location and 33% of a $300K one.
• Treatment room and device capacity. Revenue capacity is rooms multiplied by hours multiplied by utilization, and rooms are fixed at build. A location doing $1.2M in the same 2,000 square feet as one doing $375K is not paying different rent. It is converting the same fixed footprint far harder.

Live operating levers

• Cost of goods discipline. This is the largest lever the filing actually quantifies. Across the five company locations COGS ran 28.7% to 38.8% of revenue — a ten-point spread inside the franchisor’s own portfolio, on the same protocols and the same supply chain. At $1M of revenue that is $100,000. Injectables and skincare are the bulk of it, and the spread comes from waste, unit-pricing discipline, discounting practice, and product mix. Note the disclosed COGS excludes backbar, chemical peels, gloves, towels, and table covers — so true delivery cost runs higher than these figures show, and the spread is likely wider than ten points.
• Membership conversion and visit frequency. Gross Revenue is defined to include membership fees, which tells you memberships are structurally part of the model. Nothing in Item 19 isolates them, so treat this as inference rather than disclosure: in a category where injectables bring a client back perhaps once a quarter, the distance between a $500K location and a $1M location is rarely twice the foot traffic. It is retention and visit frequency against a similar client base.
• Revenue per provider hour. Also undisclosed, also structurally unavoidable. Licensed medical staffing is the binding constraint on how much a fixed room count can produce, and it is the one cost that scales with delivery rather than with time.
• Local marketing beyond the required spend. The Item 7 table carries $20,000 for local and grand-opening marketing within 60 days of opening. In a ramp-driven model, marketing is what shortens the ramp — and the disclosed figure is an opening allocation, not an operating budget.

Context you underwrite around

• Tenure, before anything else. The four cohorts run $1,224,313 / $818,413 / $561,608 / $374,182 by age. A 2024 opening at $375K is tracking the system, not lagging it. Judging a location against the $686,494 system average is judging it against a number pulled down by ten locations still in their ramp.
• Fixed fees are regressive against a ramping location. Royalty is 5% of Gross Revenue — it scales. But the $985 monthly Online Management Fee and $300 monthly Social Media/Technology Fee do not: $15,420 a year regardless of volume. That is 1.3% of revenue at the four-year cohort average and 4.1% at the first-year cohort average. The fee load is heaviest precisely when the location can least carry it, and the Online Management Fee starts at lease signing — roughly four months before you open, for about $3,940 before a single dollar of revenue.
• Company locations are not a like-for-like benchmark. The five company locations averaged $1,698,249 against $686,494 for franchised, but all five opened between 2013 and 2017 and all sit in or around greater Atlanta. Against the nine franchised locations open since 2022 or earlier — averaging $1,089,013 — the gap narrows to roughly $609,000. How much of that remainder is trade area, tenure, and home-market density rather than execution is the question worth asking.
• Full-time involvement is contractual, not optional. You or your Operating Principal must manage the business full time, and failure to do so is a default the franchisor can act on. Owners of 10% or more sign a personal guarantee. Underwrite your own compensation as a real cost, because the filing’s revenue figures sit above it.

What the disclosure cannot tell you.

It is worth being explicit about the limits, because they are unusually wide here. Item 19 reports gross revenue only for franchised locations — no EBITDA, no payroll, no margin. For company locations it adds cost of goods sold and rent, and the filing then lists what remains excluded: payroll, taxes, insurance, marketing fees, local marketing, royalties, technology fees, IT costs, professional fees, licenses and permits, office supplies, merchant account fees, and utilities.

There is no profit benchmark in this document. Membership conversion, retention, average ticket, provider productivity, and utilization — the metrics that would actually explain the spread — are all absent. Any figure you see quoted for those did not come from this filing. Building your own benchmark is not optional here; it is the only instrument available.

Questions worth putting to dermani.

• What does the revenue ramp look like month by month for locations opened in the last three years, and what proportion reach $1M by year four?
• What is membership conversion and retention across the system, and what do the strongest locations run?
• What COGS percentage should a franchisee target, and what explains the ten-point spread across your own company locations?
• For the eight franchised locations contracting with a PC or management company, what do typical monetary terms look like, and how do they affect owner economics at a given revenue level?
• What explains the gap between company locations and mature franchised locations beyond Atlanta density and tenure?
• How many locations opened in 2023 or earlier are still below $600,000, and what do they have in common?

One note on validation calls: this filing states that no franchisees have signed confidentiality provisions restricting what they may say about the system in the last three fiscal years. That is unusual and it is a genuine advantage — use it. Call the 2021 and 2022 cohort, not just the ones the franchisor suggests.

What this means for your finance function.

The ramp is the thing to underwrite, not the average. Total estimated initial investment runs $491,792 to $906,189, and the additional funds line covers three months. If a location takes three to four years to reach $1M, three months of working capital is not the requirement — it is the opening deposit. This is the single most common place medspa owners get caught.

Rent is favorable but it is a ratio, not a rate. Company locations paid between 2.6% and 8.0% of revenue in rent, averaging about 5.5% on a weighted basis (5.9% as a simple mean of the five ratios). For a 1,400–2,400 sq ft box that is a genuinely light occupancy structure — but only once revenue arrives. The same $100,000 lease is 8% of a $1.2M location and 33% of a $300K one. Occupancy is a revenue problem in this model, not a real estate problem.

Item 19 gives you no profit benchmark. This disclosure reports revenue only for franchised locations. For company locations you get COGS and rent, and the filing explicitly lists what is excluded: payroll, taxes, insurance, marketing fees, local marketing, royalties, technology fees, IT, professional fees, licenses, office supplies, merchant fees, and utilities. Note too that disclosed COGS excludes backbar, peels, gloves, towels, and table covers — so true delivery cost runs higher than the figures suggest. There is no margin benchmark here. You have to build it.

The PC structure sits between revenue and take-home. Unless state law permits otherwise, you sign a franchisor-approved Management Agreement with a professional entity that employs the physicians and controls medical services. Eight of the 23 franchised locations currently contract with a PC or management company. Those terms are negotiable, and two owners with identical revenue can land in very different places depending on how it is structured. It deserves the same scrutiny as your lease — from franchise and healthcare counsel, not from us.

Full-time involvement is contractual. You or your Operating Principal must manage the business full time, and failure to do so is a default the franchisor can act on. Owners of 10% or more sign a personal guarantee. Underwrite your own compensation as a real cost.

Bookkeeping for a dermani MEDSPA franchise.

With no margin benchmark in the filing, your own books are the only instrument you have. That raises the bar on how they are built.

• Memberships and prepaid packages as deferred revenue. Gross Revenue includes membership fees, and prepaid treatment packages are collected before delivery. Both are liabilities until the service is performed — recorded as income on receipt, a strong sales month masks an obligation you still owe.
• COGS tracked at the product level. A ten-point spread on injectables and skincare is $100,000 at $1M of revenue. That is only visible if product cost is tracked by category and reconciled against usage, not booked as a single supplier expense.
• Service revenue separated by modality. Injectables, skincare, memberships, and retail carry different margins and different consumption patterns. Blended, you cannot see which line is carrying the location.
• The PC or management company relationship recorded cleanly. Where a professional entity employs the medical staff, the flow of funds between entities needs to be documented and reconciled monthly — it is both an accounting and a compliance matter.

Capital Advisors provides bookkeeping, controller support, and fractional CFO services for franchise owners. As an Intuit Elite-tier QuickBooks ProAdvisor firm, we build the QuickBooks structure this depends on — deferred revenue schedules that reconcile, product-level COGS, and multi-entity handling where a PC is involved. For owners with more than one location, that extends into multi-unit reporting.