What is Itan's definition of 'Alternative Channels of Distribution'?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right to sell, and license others to sell, competitive or identical goods and services (either under the Marks or different trademarks) through Alternative Channels of Distribution, including within your territory and development territory, if applicable. An "Alternative Channel of Distribution" means any channel of distribution other than retail sales made to customers while present at a Salon. Examples of Alternative Channels of Distribution include:
- sales through direct marketing, such as over the Internet or through catalogs or telemarketing
- sales through retail stores that do not operate under the Marks, such as grocery stores, convenience stores, spas and tanning salons (other than spas or tanning salons operating under the Marks)
sales made at wholesale
You are not entitled to any compensation for sales that take place through Alternative Channels of Distribution.
Source: Item 12 — TERRITORY (FDD pages 31–33)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, 'Alternative Channels of Distribution' refers to methods of selling goods and services that bypass the traditional retail sales within an Itan Salon. Itan retains the right to sell, and license others to sell, competitive or identical goods and services through these alternative channels, even within a franchisee's territory.
Specifically, Itan defines 'Alternative Channel of Distribution' as any sales channel other than in-person retail sales at a Salon. Examples provided in the FDD include sales through direct marketing methods like the Internet, catalogs, and telemarketing. It also encompasses sales through retail stores not branded as Itan, such as grocery stores, convenience stores, spas, and tanning salons that are not Itan franchises. Wholesale sales also fall under this definition.
For a prospective Itan franchisee, this means that Itan can utilize these alternative channels to sell products or services that compete with the franchisee's salon, even within the franchisee's designated territory. The franchisee will not receive any compensation for sales made through these alternative channels. This lack of exclusivity and the potential for competition from Itan's other sales channels is a significant factor to consider.
Furthermore, the FDD states that franchisees are prohibited from using Alternative Channels of Distribution themselves, such as online sales or telemarketing, whether inside or outside their territory. This restriction limits a franchisee's ability to expand their sales reach beyond the physical salon location and compete with Itan's corporate-controlled alternative channels.