Does the Itan definition of 'Competing Business' include businesses that solicit franchises for a business that meets the criteria in clause (a) of the definition?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Competing Business" means any business that meets at least one of the following criteria: (a) any business that generates, or could reasonably be expected to generate, at least 50% of its revenue from the sale of: tanning services; tanning products; and/or services similar to the spa services offered at a Salon (including infrared body wraps, aqua massage, teeth whitening, salt therapy or photo light therapy); (b) any business that solicits, offers or sells franchises or licenses for a business that meets the criteria in clause (a) of this definition; and/or (c) any business that services, trains, supports, consults with, advises or otherwise assists any Person with respect to the development, management and/or operation of a business that meets the criteria in clause (a) of this definition.
A Competing Business does not include a Salon operated pursuant to a valid franchise agreement or license agreement with us or our affiliate.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the definition of a 'Competing Business' does include businesses that solicit, offer, or sell franchises or licenses for a business that meets the criteria in clause (a) of the definition. Clause (a) refers to any business that generates, or could reasonably be expected to generate, at least 50% of its revenue from the sale of tanning services, tanning products, and/or services similar to the spa services offered at an Itan Salon. These spa services include infrared body wraps, aqua massage, teeth whitening, salt therapy, or photo light therapy.
This definition is important for prospective franchisees because it outlines the scope of activities that Itan considers competitive and therefore potentially restricted. If a franchisee or their personnel engages in activities related to businesses that solicit franchises for competing tanning or spa services, it could be a breach of the Brand Protection Agreement. This agreement is signed by certain personnel and is attached to the Franchise Agreement.
The Brand Protection Agreement aims to protect Itan's market position by preventing franchisees and their personnel from being involved in businesses that directly compete with Itan's core offerings. This restriction extends not only to businesses offering similar services but also to those involved in franchising such businesses. This clause ensures that individuals associated with an Itan franchise cannot support the expansion of competing brands.
It is important for prospective franchisees to carefully review the Brand Protection Agreement and understand the full scope of the restrictions on competitive activities. Franchisees should ensure that their personnel are also aware of these restrictions to avoid any potential conflicts or breaches of the franchise agreement. Understanding these definitions and restrictions is crucial for maintaining a compliant and successful Itan franchise.