When exercising discretion under the Itan agreement, does Itan consider the individual interests of each franchisee?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.8. Good Faith Covenant. If applicable Law implies into this Agreement a covenant of good faith and fair dealing, the covenant shall not imply any rights or obligations inconsistent with the express terms hereof. This Agreement, and the relationship of the parties inherent in this Agreement, grants us discretion to make decisions, take actions and/or refrain from taking actions not inconsistent with our explicit rights and obligations under this Agreement that may favorably or adversely affect your interests. We will use our judgment in exercising the discretion based on our assessment of our own interests and balancing those interests against the interests of our franchisees, but without considering the individual interests of you or any other franchisee.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, when making decisions or taking actions that may affect a franchisee's interests, Itan will use its judgment based on its own interests and balance those interests against the interests of its franchisees generally. However, Itan will not consider the individual interests of any specific franchisee. This discretion applies as long as Itan acts consistently with its explicit rights and obligations under the Franchise Agreement.
This means that Itan franchisees should not expect Itan to prioritize their specific, individual needs or circumstances when making decisions that affect the franchise system as a whole. Itan will consider the collective interests of all franchisees, but not the unique situation of any one franchisee.
This approach is not uncommon in franchising, where franchisors must balance the needs of the entire system with the desires of individual franchisees. However, it is important for prospective Itan franchisees to understand that Itan's decisions will be made with the broader network in mind, and not necessarily with their individual business in mind. Franchisees should be prepared to accept decisions that may not always align perfectly with their own interests.