Can Itan or its affiliates be designated or approved suppliers for Itan franchisees?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
11.7. Suppliers and Purchasing.
- (a) Generally.
You must purchase, lease or license, as applicable, all goods, services and other items required by the Manual.
You must only purchase goods and services that satisfy all standards and specifications we designate.
You must comply with all sourcing and supplier restrictions we impose from time to time.
- (b) System Suppliers.
In accordance with the Manual, you must purchase certain goods and services exclusively from suppliers we designate or approve.
The Manual may designate us or our affiliate as a designated or approved supplier.
We and our affiliates may generate a profit from these purchases.
Our affiliates are currently the exclusive designated suppliers for FIT Bodywraps®, TANOLOGY® and BRONZE LUMINESSENCE™ skincare products and CALIFORNIA SPA® Ageless Serum, as well as certain branded supplies, such as name tags, bed tents, iTAN tote bags and key tags.
Our right to specify the suppliers you use is necessary so we can control the uniformity and quality of goods and services used, sold or distributed in connection with the development and operation of Salons, protect our trade secrets, negotiate bulk purchase discounts and protect the reputation and goodwill associated with our System and Marks.
You must immediately discontinue purchasing from any supplier we disapprove.
- (c) Approval Process.
If you wish to purchase alternative goods or services or you wish to purchase from an alternative supplier, you must send us a request for approval that: (i) identifies the proposed supplier and the goods/services to be purchased; (ii) includes all information we require about the goods/services and the supplier (including the supplier's qualifications, reputation, financial strength and production capabilities); and (iii) includes product samples for examination and testing purposes.
We may condition our approval on the supplier's agreement to comply with our minimum insurance, indemnification and confidentiality requirements for system suppliers.
We will approve or disapprove your request within 120 days after we receive all required information and samples.
Your request is deemed disapproved if we fail to issue our approval within the 120-day period.
You must reimburse all costs we incur to review suppliers or goods/services you propose.
We need not consider substitute goods or alternative suppliers for goods that are proprietary or branded with our Marks.
- (d) Payment Disputes.
You understand that: (i) your failure to timely pay a system supplier may jeopardize the supplier's relationship with us and other franchisees; and (ii) a supplier's termination of its relationship with us or refusal to supply goods or services to our franchisees may cause significant harm to us and our franchisees.
Accordingly, you agree to promptly pay all amounts owed to system suppliers except as otherwise permitted by this Section.
If you have a bona-fide dispute with a supplier that you believe justifies non-payment or partial payment, you must promptly notify the supplier of the particulars of your Claim and diligently pursue resolution of the Claim or prosecution of appropriate legal action.
Any trade debt that remains unpaid more than 30 days after its due date constitutes a material breach of this Agreement unless, before the end of the 30-day period: (i) you and the supplier agree to alternative payment terms; or (ii) you initiate appropriate legal action to contest the trade debt.
- (e) Supplier Payments.
If we receive rebates or other consideration from suppliers based on your purchases we may either: (i) pass such amounts through to you; or (b) deposit such amounts into the brand and system development fund.
- (f) Disclaimer of Liability.
Provided that we designate or approve system suppliers in good faith, we have no liability to you for their acts, errors or omissions including, without limitation, defective or tainted goods, delayed delivery or inability to meet demand.
With respect to goods purchased from us or our affiliate, you acknowledge that we or our affiliate purchase the goods from third-party manufacturers or suppliers and resell them to you as a convenience.
If you have any type of Claim relating to the purchase of goods or services from a system supplier, your sole recourse shall be against the supplier.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees must purchase certain goods and services exclusively from suppliers that Itan designates or approves. Itan's manual may designate Itan itself or its affiliates as approved or designated suppliers, and Itan and its affiliates may profit from these purchases. Currently, Itan's affiliates are the exclusive designated suppliers for specific products like FIT Bodywraps, TANOLOGY, BRONZE LUMINESSENCE skincare products, CALIFORNIA SPA Ageless Serum, and certain branded supplies, including name tags, bed tents, iTAN tote bags, and key tags.
Itan retains the right to specify suppliers to control the uniformity and quality of goods and services, protect trade secrets, negotiate bulk purchase discounts, and safeguard the reputation and goodwill associated with its system and marks. Franchisees must immediately stop purchasing from any supplier that Itan disapproves.
If a franchisee wishes to use alternative goods or services or purchase from an alternative supplier, they must submit a request for approval to Itan. This request must include detailed information about the proposed supplier and the goods or services, including the supplier's qualifications, reputation, financial strength, and production capabilities, as well as product samples for examination and testing. Itan may require the supplier to comply with minimum insurance, indemnification, and confidentiality requirements. Itan will approve or disapprove the request within 120 days after receiving all required information and samples; failure to respond within this period results in automatic disapproval. The franchisee must also reimburse Itan for all costs incurred in reviewing the proposed suppliers or goods/services.
Itan need not consider substitute goods or alternative suppliers for goods that are proprietary or branded with Itan's Marks. If Itan receives rebates or other consideration from suppliers based on a franchisee's purchases, Itan may either pass these amounts through to the franchisee or deposit them into the brand and system development fund. Provided that Itan designates or approves system suppliers in good faith, Itan has no liability to the franchisee for the acts, errors, or omissions of those suppliers, including issues such as defective goods or delayed delivery. The franchisee's sole recourse for claims related to purchases from a system supplier is against the supplier itself.