Considering the restrictions on suppliers in Item 8, what are the procedures for an Itan franchisee to request a waiver from using a specific supplier, impacting their obligations in Item 9?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If you wish to purchase or lease a source-restricted item from a non-approved supplier, you must send us: (a) a written request for approval; (b) product samples for testing purposes; and (c) all additional information we request. The supplier must agree to comply with our minimum insurance, indemnification and confidentiality requirements for system suppliers and allow us to periodically inspect their facility. We may also require that the supplier sign a license agreement with us if the products will bear our Marks. We will notify you of our decision within 30 days after we receive all required information and product samples. We may periodically reinspect approved products and suppliers and revoke our approval if a product or supplier fails to meet our then-current criteria. You must reimburse all costs we incur to evaluate products and suppliers you propose.
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees must adhere to source-restricted purchases for goods and services necessary for their salon's development and operation. This means that certain items must either meet Itan's specifications or be purchased from an approved or designated supplier, which could be Itan or an affiliate. The Item 9 table outlines the franchisee's obligations, referencing Item 8 for ongoing product/service purchases, making it clear that franchisees are obligated to comply with Itan's sourcing restrictions.
If an Itan franchisee wishes to use a non-approved supplier for a source-restricted item, they must submit a written request for approval, provide product samples for testing, and furnish any additional information requested by Itan. The potential supplier must also agree to comply with Itan's minimum insurance, indemnification, and confidentiality requirements, and allow Itan to inspect their facility periodically. Furthermore, Itan may require the supplier to sign a license agreement if the products will bear Itan's trademarks.
Itan will then notify the franchisee of their decision within 30 days after receiving all required information and product samples. Itan retains the right to periodically reinspect approved products and suppliers and may revoke approval if a product or supplier no longer meets their criteria. The franchisee is responsible for reimbursing Itan for all costs incurred in evaluating the proposed products and suppliers. This process ensures Itan maintains quality control and brand consistency while allowing franchisees a pathway to propose alternative suppliers, subject to Itan's approval and ongoing evaluation.