Will assigning the lease to Itan cause any rental acceleration for the Itan franchise?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Right to Assign. At any time, including, without limitation, upon the expiration or termination of the Franchise Agreement, and without Landlord's prior consent, Tenant may assign the Lease to Franchisor. In such event, Franchisor may thereafter assign the Lease to another iTAN franchisee or to an entity owned and/or controlled by Franchisor. If it does, Franchisor must first obtain Landlord's written approval of the assignee. Landlord, however, must neither unreasonably withhold nor delay its approval thereof. Landlord will acknowledge any such assignment in writing. No assignment permitted under this Section is subject to any assignment or similar fee or will cause any rental acceleration.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, assigning the lease to Itan will not cause rental acceleration. Specifically, if the franchisee assigns the lease to Itan, or to another Itan franchisee, the lease assignment will not be subject to any assignment or similar fee, nor will it cause any rental acceleration. This is provided that Itan first obtains the Landlord's written approval of the assignee, and the Landlord does not unreasonably withhold or delay its approval. The Landlord will also acknowledge the assignment in writing.
This clause protects the franchisee from unexpected costs or penalties related to the lease if they decide to assign it to Itan. It also ensures a smoother transition process if the franchisee exits the business or transfers ownership. The landlord's agreement to acknowledge the assignment in writing provides a clear record of the transfer, further safeguarding the franchisee's interests.
It is important for prospective Itan franchisees to understand the terms of the lease agreement and the Lease Addendum, as these documents outline the rights and obligations of both the franchisee and the franchisor. Franchisees should consult with legal counsel to ensure they fully understand the implications of these agreements before signing them.