What factors does Itan rely on when granting franchise rights?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Attached]*
ITAN CONVERSION ADDENDUM
| "Effective | Date") | between | iTAN | Franchising, | Inc., | California | corporation | ("we" | or | "us") | and |
|---|---|---|---|---|---|---|---|---|---|---|---|
| a | |||||||||||
| , a(n) ("you" and, together with us, the "Parties"). | |||||||||||
Background
- A. You currently own and operate a business (the "Current Business") from the premises located at the address listed in Part A of Attachment A to this Addendum (the "Premises").
- B. The Current Business offers services that are similar to the services offered by an iTAN salon.
- C. You desire to acquire an iTAN franchise for purposes of converting your Current Business to an iTAN Salon and we are willing to grant you the right and obligation to do so.
- D. Concurrently with the execution of this Addendum, the Parties are entering into an iTAN Franchise Agreement (the "Franchise Agreement"), pursuant to which we will grant you the right and obligation to convert the Current Business to an iTAN Salon that operates in accordance with our System and features tanning, beauty and wellness services (e.g., FIT Bodywrap®, aqua massage, teeth whitening, salt therapy, photo light therapy and other approved services) and sells related retail items under our Marks (your "ITAN Salon").
- E. In order to effectuate the conversion of your Current Business to an iTAN Salon, the Parties desire to modify the Franchise Agreement according to the terms and conditions set forth herein.
- F. In consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, and intending to be legally bound, the Parties hereby agree to the terms and conditions set forth below.
Agreement
- 1. Defined Terms and Section References. Any capitalized term that is not defined in this Addendum shall have the meaning given to such term in the Franchise Agreement.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
The 2025 Itan Franchise Disclosure Document outlines several scenarios where Itan grants franchise rights, particularly focusing on conversions of existing businesses and development rights within a specific territory. If a prospective franchisee already owns a business offering similar services to Itan, Itan may grant a franchise to convert that existing business into an Itan salon. This conversion is contingent on the franchisee meeting specific requirements and obligations outlined in both an addendum and the franchise agreement itself.
Itan also grants rights to develop, open, and operate salons within a defined "Development Territory." These rights come with obligations to develop a certain number of salons (Required Salons) and an option to develop additional salons (Optional Salons). However, these development rights do not automatically grant the franchisee any rights to Itan's intellectual property.
Furthermore, Itan retains certain rights even within the Development Territory granted to a franchisee. Itan can still develop or operate salons, or license others to do so, if those salons were already in operation, under development, or had a franchise agreement executed before the effective date of the new franchise agreement. Itan also reserves the right to engage in acquisitions that could result in the conversion of other companies' outlets to Itan salons, even within a franchisee's Development Territory. Itan can also sell competitive goods and services through other channels of distribution within the Development Territory.