What is the cure period for non-financial defaults under the Itan franchise agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| THE FRANCHISE RELATIONSHIP | ||
|---|---|---|
| PROVISION S | ||
| a. Length of | FA: 1 (definition of Term) | Term is equal to 10 years. |
| franchise term | & 4.1 | |
| ADA: 1 (definition of | Term expires on the opening date listed in the development schedule for | |
| Term) | the last Salon you are required to develop. | |
| b. Renewal or extension of the term | FA: 4.1 & 4.2 | If you meet our conditions for renewal, you can enter into 2 consecutive successor franchise agreements. Each renewal term will be 5 years. The parties may mutually agree to further renewals but neither party is obligated to do so (subject to state law). |
| ADA: Not Applicable | No renewal rights. Parties must enter into a new area development agreement in order to grant you additional development rights. | |
| c. Requirements for you to renew or extend | FA: 4.1 & 4.2 | You must: not be in default; give us timely notice; sign then-current form of franchise agreement; sign general release (subject to state law); pay renewal fee; remodel Salon and upgrade furniture, fixtures and equipment to current standards; and extend lease term. If you renew, you may be required to sign a contract with materially different terms and conditions than the original contract. |
| ADA: Not Applicable | No renewal rights. Parties must enter into a new area development agreement in order to grant you additional development rights. | |
| d. Termination by | FA: 20.1 | You can terminate if we default and fail to timely cure. |
| you | ||
| ADA: Not Applicable | You can terminate under any grounds permitted by law. | |
| e. Termination by | FA: 20.3 | We can terminate without cause if you and we mutually agree to |
| us without cause | terminate. | |
| ADA: Not Applicable | Not applicable | |
| THE FRANCHISE RELATIONSHIP | ||
| Provision | SECTIONS IN AGREEMENT | SUMMARY |
| f. Termination by | FA: 20.2 | W |
| us with cause | ADA: 9.1 | We can terminate if you default. |
| g. "Cause" defined - curable defaults | FA: 20.2 | You have the following cure periods: (a) 10 days for financial defaults; and (b) 30 days for any other default (other than a default described below under "non-curable defaults"). |
| - curable defaults | ADA: 9.1 | You have 30 days to cure any default, other than defaults described below under "non-curable defaults". |
| h. "Cause" defined - non-curable defaults | FA: 20.2 | The following defaults cannot be cured: insolvency, bankruptcy or seizure of assets; failure to successfully complete training; failure to find approved site, secure lease or open in timely manner; abandonment; failure to maintain required license or permit; conviction of certain crimes or subject of certain administrative actions; violation of material law; commission of act that may adversely affect reputation of System or Marks; health or safety hazards; material misrepresentations; 2 nd underreporting of amounts due by at least 3%; unauthorized Transfers; unauthorized use of our intellectual property; violation of brand protection covenant; breach of Franchise Owner Agreement; breach of legal compliance representations; failure to notify us of a matter described in §15.6; termination of lease due to your default; 3 or more default notices in a 12-month period; or termination of any other agreement between you (or your affiliate) and us (or our affiliate) due to your default. However, termination of an ADA due to breach of the development schedule is not grounds for termination of any Franchise Agreement that is otherwise in good standing. |
| ADA: 9.1 | If we terminate a franchise agreement due to your default, we may terminate the ADA without opportunity to cure. |
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, franchisees have a specific timeframe to correct defaults that are not related to financial obligations. The standard cure period for non-financial defaults is 30 days after receiving a default notice. This means that if Itan notifies a franchisee of a breach of the franchise agreement that doesn't involve a failure to pay money, the franchisee has 30 days to fix the issue and avoid further action from the franchisor.
However, the FDD also specifies certain defaults that cannot be cured. These include situations like insolvency, bankruptcy, abandonment of the business, failure to maintain required licenses, criminal convictions, or repeated default notices. If a franchisee commits one of these non-curable defaults, Itan has the right to terminate the franchise agreement immediately without providing an opportunity to correct the issue.
It is important for prospective Itan franchisees to understand the distinction between curable and non-curable defaults, as well as the specific actions that constitute each type of default. Paying close attention to the default notice and taking swift action to cure any curable defaults within the 30-day period is crucial for maintaining a good standing with Itan and avoiding termination of the franchise agreement.