What are the exceptions to an unpaid trade debt constituting a material breach of the Itan Franchise Agreement?

According to Itan's 2025 Franchise Disclosure Document, a trade debt that remains unpaid more than 30 days after its due date constitutes a material breach of the Franchise Agreement. However, there are two exceptions to this rule.

First, if the franchisee and the supplier agree to alternative payment terms before the end of the 30-day period, the unpaid debt will not be considered a material breach. This provides an opportunity for Itan franchisees to negotiate payment plans with suppliers if they are facing temporary financial difficulties.

Second, if the franchisee initiates appropriate legal action to contest the trade debt before the end of the 30-day period, the unpaid debt will not be considered a material breach. This allows Itan franchisees to dispute charges they believe are incorrect or unjustified without automatically being in breach of the Franchise Agreement. It is important for prospective franchisees to understand these exceptions, as failure to pay suppliers in a timely manner can have serious consequences, including termination of the franchise agreement.