Does the definition of 'Competing Business' for Itan include businesses that train people with respect to the development of a business that generates at least 50% of its revenue from tanning services?
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, a 'Competing Business' is defined to include businesses that train people with respect to the development, management, and/or operation of a business that generates at least 50% of its revenue from tanning services. Specifically, the definition includes 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 of generating at least 50% of its revenue from tanning services, tanning products, and/or services similar to the spa services offered at an Itan Salon.
This definition has significant implications for prospective Itan franchisees and their personnel. It restricts franchisees and their employees or independent contractors from being involved with businesses that support or train others in operating tanning businesses similar to Itan. This restriction is designed to protect Itan's business model and confidential information by preventing franchisees and their staff from using their knowledge gained from Itan to benefit competing businesses.
The Brand Protection Agreement, as mentioned in the FDD, reinforces these restrictions. Personnel of the Itan franchisee must sign this agreement, acknowledging their understanding of these limitations and agreeing to comply with them. This agreement aims to prevent the misuse of Itan's intellectual property and maintain the integrity of the franchise system.
It is important for potential franchisees to carefully review the Brand Protection Agreement and understand the full scope of these restrictions, especially if they have prior experience or future aspirations in the tanning or spa service industry. Understanding these restrictions is crucial for ensuring compliance and avoiding potential legal issues with Itan.