Can Itan delegate its obligations under the Franchise Agreement without assigning the agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
benefit of any assignee(s) or other legal successor(s) to our interest in this Agreement, provided that we shall, subsequent to any such assignment, remain liable for the performance of our obligations under this Agreement up to the effective date of the assignment.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan retains liability for its obligations under the Franchise Agreement even after assigning the agreement. Specifically, Itan can assign the Franchise Agreement to another party, but Itan will still be responsible for performing its duties up to the date the assignment takes effect. This means that if the new assignee fails to meet the obligations, the franchisee may have recourse against Itan for any failures that occurred before the assignment.
This provision offers some protection to the franchisee. It ensures that Itan cannot simply transfer its responsibilities to another party and then wash its hands of any prior issues. Itan remains accountable for its performance during the period it was directly involved.
However, the franchisee should be aware that after the effective date of assignment, the new assignee becomes solely responsible. It is important to assess the financial stability and willingness of any potential assignee to fulfill the obligations under the Franchise Agreement. Franchisees should seek legal counsel to fully understand their rights and obligations in the event of an assignment.