Who are considered immediate family members whose actions could trigger a breach of the Itan agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Because (a) an Owner could circumvent the intent of §14 by disclosing Confidential Information to an immediate family member (i.e., spouse, parent, sibling, child or grandchild) and (b) it would be difficult for us to prove whether the Owner disclosed Confidential Information to the family member, each Owner agrees that he or she will be presumed to have violated the terms of §14 if any member of his or her immediate family engages in any Prohibited Activity during the Term or Post-Term Restricted Period or uses or discloses Confidential Information.
However, the Owner may rebut this presumption with evidence conclusively showing he or she did not disclose Confidential Information to the family member.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, immediate family members whose actions could trigger a breach of the agreement are defined as a franchisee's spouse, parent, sibling, child, or grandchild. Itan includes this provision because it recognizes the potential for franchisees to circumvent the agreement, specifically concerning confidential information, by disclosing it to close family members.
For Itan franchisees, this means that the actions of their immediate family members are, to some extent, their responsibility under the franchise agreement. If a franchisee's family member engages in prohibited activities or misuses confidential information, Itan will presume that the franchisee breached the agreement by disclosing confidential information to that family member.
However, the franchisee has the opportunity to rebut this presumption by providing evidence that conclusively proves they did not disclose confidential information to the family member in question. This places the burden of proof on the franchisee to demonstrate their innocence, which may require them to take steps to ensure their family members also respect the confidentiality and non-compete clauses of the franchise agreement.