For Itan, are currency fluctuations considered 'Force Majeure'?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Force Majeure" means acts or circumstances that are beyond a party's control, including fire, storm, flood, earthquake, explosion or accident, acts of war or terrorism, rebellion, insurrection, sabotage, epidemic, failures or delays of transportation and strikes, provided that: (a) the non-performing party promptly notifies the other party of the Force Majeure event; (b) the non-performing party is without fault and the delay or failure could not have been prevented by reasonable precautions by the non-performing party; (c) nothing herein shall excuse or permit any delay or failure to pay fees or other amounts owed on the applicable due date; (d) insolvency, lack of required funds or financing, currency fluctuations, currency devaluations, foreign exchange controls or inflation shall never be deemed Force Majeure; and (e) an epidemic or pandemic of a contagious illness or disease, or economic or financial changes caused by an epidemic or pandemic of a contagious illness or disease, shall never be deemed Force Majeure except to the extent a Governmental Authority mandates closure (or prevents the opening) of the Salon as a result of such epidemic or pandemic.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, currency fluctuations are explicitly excluded from being considered a 'Force Majeure' event. The FDD defines 'Force Majeure' as events beyond a party's control, such as natural disasters, war, or epidemics. However, the definition clearly states that 'insolvency, lack of required funds or financing, currency fluctuations, currency devaluations, foreign exchange controls or inflation shall never be deemed Force Majeure.'
This exclusion has significant implications for prospective Itan franchisees. If a franchisee experiences financial difficulties due to currency fluctuations, they cannot claim 'Force Majeure' to excuse their non-performance under the franchise agreement. For example, if a franchisee's costs increase significantly due to currency devaluation, making it difficult to pay royalties or meet other financial obligations, Itan is not obligated to provide any relief or delay enforcement of the agreement.
This is a notable point because it places the financial risk associated with currency fluctuations squarely on the franchisee. While many franchise agreements include 'Force Majeure' clauses to protect both parties from unforeseen events, Itan specifically carves out currency-related issues. Therefore, prospective franchisees should carefully consider the potential impact of currency fluctuations on their business, especially if they are operating in a country with volatile currency markets. It is advisable to consult with financial advisors and legal counsel to fully understand the risks and develop strategies to mitigate them.
It is also important to note that while epidemics or pandemics are generally excluded from being considered 'Force Majeure', an exception exists if a Governmental Authority mandates closure (or prevents the opening) of the Salon as a result of such epidemic or pandemic. This provides a limited form of protection to the franchisee in such specific circumstances.