What expenses must an Itan franchisee reimburse related to enforcing Brand Protection or Confidentiality Agreements?

According to Itan's 2025 Franchise Disclosure Document, if a franchisee breaches the Brand Protection Agreement, they may be responsible for covering Itan's legal costs. Specifically, if Itan hires an attorney or files a suit against the franchisee for breaching the agreement, the losing party is obligated to reimburse the prevailing party for reasonable attorney's fees and costs. This means that if the franchisee loses the suit, they must pay Itan's attorney's fees and associated costs.

This provision is significant for prospective Itan franchisees because it highlights the financial risk associated with non-compliance with the Brand Protection Agreement. The cost of legal representation can be substantial, and franchisees should understand that they could be liable for these costs if they are found to have breached the agreement. This could include actions such as misusing confidential information, engaging in unfair competition, or violating intellectual property rights.

It is important to note that Itan is not required to post a bond if they seek injunctive relief against a franchisee, but if a court requires a bond despite their agreement, the bond amount will not exceed $1,000. However, the franchisee's potential liability for Itan's legal fees and costs could far exceed this amount, depending on the complexity and duration of the legal proceedings. Franchisees should carefully review the terms of the Brand Protection Agreement and ensure they understand their obligations to avoid potential legal disputes and associated costs.