What documentation must an Itan franchisee provide to the franchisor when seeking to transfer their interest?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ent standards and specifications (these changes must be completed within 12 months after the Transfer or such shorter period of time we specify);
- (i) you or the transferee pay us a $10,000 transfer fee to defray expenses we incur related to the Transfer (in addition to the transfer fee, you must reimburse us for any commission we pay our broker if our broker finds the transferee);
- (j) you and your Owners sign a General Release;
- (k) you agree to subordinate the transferee's financial obligations to you to the transferee's financial obligations owed to us pursuant to the franchise agreement (we may require you to enter into a written subordination agreement);
- (l) we choose not to exercise our right of first refusal described in §19.5; and
- (m) you or the transferring Owner, as applicable, and the transferee satisfy all other conditions we reasonably require as a condition to approval of the Transfer.
Our consent to a Transfer shall not constitute a waiver of any Claims we have against the transferor or our right to demand the transferee comply with all terms of the franchise agreement.
- 19.3. Permitted Transfers. You may engage in a Permitted Transfer without our prior approval, but you must: (a) give us at least 10 days' prior notice; and (b) upon our request, cause the former Franchisee Entity to sign a corporate guarantee in the format we require to secure performance of the new Franchisee Entity's financial obligations under all Definitive Agreements (if the Permitted Transfer results in a new Franchisee Entity).
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer their interest, they must first obtain a bona-fide offer executed by the purchaser after completion of due diligence and send it to Itan. For a permitted transfer, the franchisee must give Itan at least 10 days prior notice. Additionally, upon Itan's request, the former Franchisee Entity must sign a corporate guarantee in the format Itan requires to secure performance of the new Franchisee Entity's financial obligations under all Definitive Agreements if the Permitted Transfer results in a new Franchisee Entity.
Furthermore, both the franchisee and the owners, along with the transferee, are required to sign all documents that Itan reasonably requests to effectuate and document the Permitted Transfer. The franchisee and their owners must sign a General Release. The franchisee must also agree to subordinate the transferee's financial obligations to the franchisee to the transferee's financial obligations owed to Itan pursuant to the franchise agreement, and Itan may require a written subordination agreement.
Itan must choose not to exercise its right of first refusal. Finally, the franchisee or the transferring Owner, as applicable, and the transferee must satisfy all other conditions Itan reasonably requires as a condition to approval of the Transfer. It is important to note that Itan's consent to a Transfer does not waive any claims Itan has against the transferor or its right to demand the transferee comply with all terms of the franchise agreement.