Will Itan be deemed to have waived its rights if it accepts payment from the franchisee after a breach?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Neither party is deemed to have waived or impaired any of its rights under this Agreement, including the right to require strict compliance with all terms of this Agreement or terminate this Agreement if the other party fails to comply with such terms, by virtue of: (a) any custom or practice of the parties at variance with the terms of this Agreement; (b) any failure, refusal or neglect by a party to exercise any right under this Agreement or require the other party to strictly comply with any term of this Agreement; (c) our waiver, failure or refusal to exercise any of our rights with respect to other franchisees; or (d) our acceptance of payment from you after your breach.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan is not deemed to have waived or impaired any of its rights under the Franchise Agreement if they accept payment from the franchisee after a breach has occurred. This includes the right to require strict compliance with all terms of the agreement or to terminate the agreement if the franchisee fails to comply with such terms.
This provision protects Itan's ability to enforce the franchise agreement even if they have accepted payments from a franchisee who is in breach. For a prospective franchisee, this means that simply making payments does not excuse any prior breaches of the agreement. Itan can still take action against the franchisee for those breaches, up to and including termination of the agreement, regardless of whether payments have been accepted.
This type of clause is common in franchise agreements, as it allows the franchisor to maintain some flexibility in dealing with franchisees who may be experiencing difficulties while still preserving their right to enforce the agreement. However, franchisees should be aware that Itan's acceptance of payments does not constitute a waiver of any prior breaches and that Itan can still take action against them for those breaches.