What constitutes 'good cause' for Itan to terminate the 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)
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, 'good cause' for termination includes the failure of the franchisee to comply with any lawful provision of the franchise agreement. Itan must provide written notice of the failure and a reasonable opportunity to cure the failure, which in no event needs to be more than 30 days.
Additionally, Itan can terminate the agreement, effective immediately upon delivery of a termination notice, if the franchisee or one of their owners or affiliates defaults under any Definitive Agreement. Itan can also terminate if the franchisee (or an owner) breaches any provision of the agreement and fails to cure it within 30 days after receiving a default notice.
These provisions are typical in franchise agreements, as they protect the franchisor's brand and system standards. Prospective Itan franchisees should carefully review the franchise agreement to understand all the specific obligations and potential defaults that could lead to termination. Understanding these terms is crucial for maintaining a successful and compliant franchise operation.