Besides the franchisee's salon, what other locations are considered when defining the 'Restricted Territory' for an Itan franchise?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Restricted Territory" means the geographic area within a 10-mile radius from: (a) your Salon (including the Salon's premises); and (b) all other Salons that are operating or under construction when the Post-Term Restricted Period begins; provided, however, that if a court of competent jurisdiction determines the foregoing Restricted Territory is too broad to be enforceable then Restricted Territory means the
geographic area within a 10-mile radius from your Salon (including the Salon's premises).
- "Salon" means any salon we authorize to operate under the Marks and use our System.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the 'Restricted Territory' is not solely based on the franchisee's salon location. It also includes all other Itan salons that are either operating or under construction when the post-term restricted period begins. This definition impacts where a former franchisee can operate a competing business after their franchise agreement ends.
The document specifies that the restricted territory extends to a 10-mile radius from both the franchisee's salon and any other operating or under-construction Itan salons at the start of the post-term restriction. This means that the more Itan locations nearby, the larger the area where the franchisee would be restricted from opening a competing business after leaving the Itan system.
However, the definition also includes a caveat: if a court deems the 10-mile radius too broad to be enforceable, the restricted territory will default to a 10-mile radius solely around the former franchisee's salon. This clause provides a degree of flexibility and acknowledges potential legal challenges to overly broad non-compete agreements. Prospective franchisees should consider the density of existing and planned Itan locations in their area, as this will directly affect the scope of their post-term non-compete obligations.