What is an 'Excluded Claim' as defined in the Itan FDD?

According to Itan's 2025 Franchise Disclosure Document, an 'Excluded Claim' refers to any claim that, as per Section 22 of the agreement, is not subject to mandatory mediation. This means that certain types of disputes between Itan and its franchisees do not necessarily have to go through the mediation process before litigation can begin.

Specifically, Section 22 outlines the dispute resolution process, which generally involves negotiation and mediation. However, claims alleging a breach of Sections 14, 17, and/or 21 of the franchise agreement are designated as 'Excluded Claims.' These claims are not subject to mandatory negotiation or mediation unless both Itan and the franchisee mutually agree to it. This provision allows either party to bypass mediation and proceed directly to litigation for these specific types of disputes.

This is a significant point for prospective Itan franchisees because it defines the pathway for resolving disagreements. Knowing which claims are 'Excluded' helps a franchisee understand when they might be able to proceed directly to court without first attempting mediation. It also highlights the importance of understanding Sections 14, 17, and 21 of the franchise agreement, as breaches of these sections fall under the 'Excluded Claims' provision. Franchisees should seek legal counsel to fully understand their rights and obligations under these sections.