Are epidemics or pandemics automatically considered 'Force Majeure' events for Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
or other equity, ownership or beneficial interest in a business or Entity (including voting rights).
- "Excluded Claim" means any Claim that, according to §22, is not subject to mandatory mediation.
- "Force Majeure" means acts or circumstances that are beyond a party's control, including fire, storm, flood, earthquake, explosion or accident, acts of war or terrorism, rebellion, insurrection, sabotage, epidemic, failures or delays of transportation and strikes, provided that: (a) the non-performing party promptly notifies the other party of the Force Majeure event; (b) the non-performing party is without fault and the delay or failure could not have been prevented by reasonable precautions by the non-performing party; (c) nothing herein shall excuse or permit any delay or failure to pay fees or other amounts owed on the applicable due date; (d) insolvency, lack of required funds or financing, currency fluctuations, currency devaluations, foreign exchange controls or inflation shall never be deemed Force Majeure; and (e) an epidemic or pandemic of a contagious illness or disease, or economic or financial changes caused by an epidemic or pandemic of a contagious illness or disease, shall never be deemed Force Majeure except to the extent a Governmental Authority mandates closure (or prevents the opening) of the Salon as a result of such epidemic or pandemic.
- "Franchise Owner Agreement" means the Franchise Owner Agreement that must be signed by the Owners and their spouses pursuant to §9, the current form of which is attached as ATTACHMENT "D".
- "Franchisee Entity" means an Entity that: (a) signs this Agreement as the franchisee (if this Agreement is signed by an Entity); or (b) assumes this Agreement subsequent to its execution by the original Owners.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, an epidemic or pandemic is not automatically considered a 'Force Majeure' event.
Specifically, the FDD states that an epidemic or pandemic of a contagious illness or disease, or economic or financial changes caused by such events, are not automatically deemed 'Force Majeure'. However, there is an exception: if a Governmental Authority mandates the closure (or prevents the opening) of the Salon as a direct result of the epidemic or pandemic, then it can be considered a 'Force Majeure' event.
This means that if an Itan franchisee experiences business disruptions due to an epidemic or pandemic, it will only be excused as a 'Force Majeure' event if a government order forces the salon to close or prevents its opening. Standard economic or financial impacts stemming from an epidemic do not automatically qualify. This is a critical distinction for franchisees to understand, as it affects their obligations and potential liabilities under the franchise agreement during such events. It is important to note that even when a 'Force Majeure' event is recognized, it will not excuse or permit any delay or failure to pay fees or other amounts owed on the applicable due date.
In general, 'Force Majeure' will not excuse or permit any failure to perform for more than 180 days. If the period of non-performance exceeds 180 days from receipt of notice of the 'Force Majeure' event, the party whose ability to perform has not been affected may immediately terminate the agreement by giving written notice of termination to the other party.