Can Itan or its affiliate purchase goods from suppliers in bulk and resell them to franchisees?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.7. Purchase Agreements. We may, but need not, negotiate purchase agreements with suppliers to obtain discounted prices for franchisees. We will arrange for you to be able to purchase the goods or services directly from the supplier at the discounted prices we negotiate (subject to any rebates the supplier pays to us). We or our affiliate may also purchase goods from suppliers in bulk and resell them to you at our cost plus shipping fees and a markup.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan or its affiliate has the option to purchase goods in bulk from suppliers and resell them to franchisees. Specifically, Itan may purchase goods in bulk and resell them to the franchisee at Itan's cost, plus shipping fees and a markup.
Itan franchisees are generally required to purchase or lease all goods, services, and other items as specified in the Manual. These goods and services must meet Itan's standards and specifications, and franchisees must adhere to any sourcing or supplier restrictions imposed by Itan. In some cases, franchisees must purchase certain goods and services exclusively from suppliers designated or approved by Itan, which may include Itan or its affiliates. Itan and its affiliates may profit from these purchases.
If a franchisee wishes to use alternative goods or services or purchase from a different supplier, they must request approval from Itan. This request must include detailed information about the proposed supplier and goods/services, including samples for examination and testing. Itan has 120 days to approve or disapprove the request, and the franchisee must cover all costs Itan incurs in reviewing the proposed supplier or goods/services. Itan does not need to consider substitutes for goods that are proprietary or branded with Itan's Marks.
It is important to note that Itan disclaims liability for the acts, errors, or omissions of designated or approved system suppliers, provided that they are designated or approved in good faith. For goods purchased directly from Itan or its affiliate, Itan acknowledges that they are reselling goods purchased from third-party manufacturers or suppliers as a convenience to the franchisee. If a franchisee has a claim related to goods or services purchased from a system supplier, their sole recourse is against that supplier.