What events can cause the 'Term' of the Itan area development agreement to expire?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
(v) if the lease for your premises is terminated due to your default;
(w) if we send you three (3) or more default notices within a 12-month period (even if cured);
(x) if we (or our affiliate) terminate any Definitive Agreement, other than an area development agreement, due to a default committed by you (or your affiliate or an Owner); or
(y) if you (or an Owner) breach any other provision of this Agreement, including any mandatory provision in the Manual, and fail to cure within 30 days after receipt of a default notice.
If we send you a default notice we may cease to perform our obligations under this Agreement until you cure the breach, unless our failure to perform would materially impair your ability to cure.
20.3. By Mutual Agreement. If you and we mutually agree in writing to terminate this Agreement, any notice or cure period that might otherwise apply shall be deemed waived.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to the 2025 Itan FDD, several events can lead to the termination of the area development agreement. These include specific breaches of the agreement by the franchisee, such as the termination of the lease for the premises due to the franchisee's default. Additionally, if Itan sends the franchisee three or more default notices within a 12-month period, even if the franchisee cures each default, this can result in termination.
Furthermore, if Itan (or its affiliate) terminates any other agreement with the franchisee (excluding the area development agreement itself) due to a default by the franchisee (or an affiliate or owner), this can also trigger the termination of the area development agreement. A general breach of any provision of the agreement, including mandatory provisions in the manual, can lead to termination if the franchisee fails to cure the breach within 30 days after receiving a default notice from Itan.
Finally, Itan and the franchisee can mutually agree in writing to terminate the agreement, waiving any required notice or cure periods. These termination conditions are typical in franchise agreements, designed to protect the franchisor's brand and system standards while also providing franchisees an opportunity to correct any deficiencies.