What is considered an 'Acquisition' by Itan, and how does it relate to territory rights?

According to Itan's 2025 Franchise Disclosure Document, an "Acquisition" refers to Itan acquiring, or being acquired by, another business or chain that may sell competitive or identical goods or services. These acquired businesses may then be converted into Itan Salons, regardless of their location. This definition is important for prospective franchisees to understand because it directly impacts their territorial protections.

Specifically, Itan reserves the right to allow these acquired or converted businesses to operate within a franchisee's territory or development territory. This means that even if a franchisee has territorial protections, Itan could potentially introduce a competing Itan Salon into that territory through an acquisition. This is a significant exception to the territorial protections that a franchisee might otherwise expect.

This clause highlights a potential risk for Itan franchisees. While the standard franchise agreement may offer some territorial protection, the "Acquisition" clause allows Itan to circumvent those protections. Prospective franchisees should carefully consider this potential for competition when evaluating the Itan franchise opportunity and discuss with Itan how frequently acquisitions have occurred in the past and what criteria are used to determine if an acquired business is converted into an Itan Salon within an existing franchisee's territory.