What is a condition for Itan's consent to the transfer of the franchise agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
the character, skill, attitude, business ability and financial resources of you and your Owners. Because this Agreement is a personal services contract, neither you nor any Owner may engage in a Transfer (other than a Permitted Transfer) without our prior approval. Any Transfer (other than a Permitted Transfer) without our approval is void and constitutes a breach of this Agreement. We will not unreasonably withhold our approval of a proposed Transfer if all of the following conditions are satisfied:
- (a) we believe the proposed transferee has sufficient business experience, aptitude and financial resources to own and operate a Salon and meets our minimum criteria for franchisees;
- (b) you and your affiliates and Owners are in full compliance with all Definitive Agreements;
- (c) the transferee's owners successfully complete, or make arrangements to attend, the initial training program and the transferee pays any applicable training fee (the transfer fee covers training for one (1) Person);
- (d) your landlord consents to the assignment of your lease to the transferee, or the transferee is diligently pursuing an approved substitute location within the Site Selection Area;
- (e) the transferee and its owners obtain all licenses and permits required by applicable Law to own and operate the Salon;
- (f) the transferee: (i) agrees to discharge and guarantee your obligations under this Agreement and any other Business contracts (including customer contracts/obligations and supplier contracts); and (ii) signs any agreement we require to confirm the foregoing;
- (g) the transferee and its owners sign our then-current form of franchise agreement (unless we instruct you to assign this Agreement to the transferee) except that: (i) the Term and renewal term(s) shall be the Term and renewal term(s) remaining under this Agreement unless we specify otherwise; and (ii) the transferee need not pay a separate initial franchise fee;
- (h) the transferee agrees to remodel the Salon and upgrade all furniture, fixtures and equipment to conform to our then-current standards and specifications (these changes must be completed within 12 months after the Transfer or such shorter period of time we specify);
- (i) you or the transferee pay us a $10,000 transfer fee to defray expenses we incur related to the Transfer (in addition to the transfer fee, you must reimburse us for any commission we pay our broker if our broker finds the transferee);
- (j) you and your Owners sign a General Release;
- (k) you agree to subordinate the transferee's financial obligations to you to the transferee's financial obligations owed to us pursuant to the franchise agreement (we may require you to enter into a written subordination agreement);
- (l) we choose not to exercise our right of first
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, there are several conditions that must be satisfied for Itan to approve a franchise transfer. These conditions include that Itan believes the proposed transferee has sufficient business experience, aptitude, and financial resources to own and operate a salon and meets Itan's minimum criteria for franchisees. Additionally, the franchisee, their affiliates, and owners must be in full compliance with all definitive agreements. The transferee's owners must also successfully complete the initial training program or make arrangements to attend it, and the transferee must pay any applicable training fee.
Other conditions include obtaining the landlord's consent to the assignment of the lease to the transferee, or the transferee diligently pursuing an approved substitute location within the Site Selection Area. The transferee and its owners must obtain all licenses and permits required by applicable law to own and operate the salon. The transferee must agree to discharge and guarantee the current franchisee's obligations under the Franchise Agreement and any other business contracts, and sign any agreement Itan requires to confirm this. The transferee and its owners must sign Itan's then-current form of franchise agreement, with some exceptions regarding the term, renewal term, and initial franchise fee.
Furthermore, the transferee must agree to remodel the salon and upgrade all furniture, fixtures, and equipment to conform to Itan's then-current standards and specifications within 12 months after the transfer. The current franchisee or the transferee must pay Itan a $10,000 transfer fee to defray expenses related to the transfer, and reimburse Itan for any commission paid to their broker if the broker finds the transferee. Finally, the current franchisee and their owners must sign a General Release, agree to subordinate the transferee's financial obligations to the current franchisee to the transferee's financial obligations owed to Itan, and satisfy all other conditions Itan reasonably requires as a condition to approval of the transfer. Itan's consent to a transfer does not waive any claims against the transferor or the right to demand compliance from the transferee.