What constitutes a breach of the Franchise Owner Agreement that could lead to termination of the Itan franchise agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
hase, or at our option, the representations and warranties contained in the offer. If we do not exercise our right of first refusal, you or the Owner, as applicable, may complete the Transfer to the purchaser pursuant to the terms of the offer, subject to the requirements of §8.2, including our approval of the transferee. If the sale is not completed within 120 days after we receive the offer, or there is a material change to the terms of sale, we will again have the right of first refusal specified in this Section. Our right of first refusal shall not apply to a Permitted Transfer.
9. TERMINATION
- 9.1. By Us. We may terminate this Agreement, effective upon delivery of a notice of termination, for any of the following reasons, all of which constitute material events of default and "good cause" for termination, and without opportunity to cure except for any cure period expressly set forth below:
- (i) if we terminate any Definitive Agreement due to a default committed by you or one of your Owners or affiliates; or
- (ii) if you (or an Owner) breach any provision of this Agreement and fail to cure within 30 days after receipt of a default notice.
- 9.2. By Mutual Agreement. If you and we mutually agree in writing to terminate this Agreement, any notice or cure period that might otherwise apply shall be deemed waived.
- 10. EFFECT OF TERMINATION. Termination of this Agreement ends all your rights and development obligations under this Agreement, including your interests in the Development Territory and right to sign new Franchise Agreements or open new Salons. We will not refund any portion of the development fee.
- **11.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–39)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the Franchise Owner Agreement can be terminated by Itan if certain events occur. Itan may terminate the agreement if any Definitive Agreement is terminated due to a default by the franchisee, its owners, or affiliates. Additionally, a breach of any provision within the Franchise Owner Agreement, including mandatory provisions in the manual, can lead to termination if not cured within 30 days after receiving a default notice.
Furthermore, the agreement can be terminated if the lease for the franchisee's premises is terminated due to the franchisee's default. Receiving three or more default notices within a 12-month period, even if the defaults are cured, is also grounds for termination. If Itan or its affiliate terminates any Definitive Agreement (excluding area development agreements) due to a default by the franchisee, its affiliate, or an owner, this can also lead to termination of the Franchise Owner Agreement.
It is important to note that if Itan sends a default notice, they may cease performing their obligations under the agreement until the breach is resolved, unless this failure to perform would significantly hinder the franchisee's ability to cure the breach. However, the agreement can also be terminated by mutual written agreement, in which case any notice or cure periods are waived. These termination conditions highlight the importance of adhering to the terms of the agreements and maintaining a good business relationship with Itan to avoid potential termination.