What financial obligations must the Itan franchisee agree to subordinate?

According to Itan's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer their franchise to a new owner, they must agree to subordinate the transferee's financial obligations to them to the transferee's financial obligations owed to Itan. This means that in the event of a transfer, Itan's financial claims against the new franchisee take precedence over any financial claims the original franchisee may have against the new franchisee.

This requirement protects Itan's financial interests in the franchise system by ensuring that its claims are prioritized in the event of a transfer. It also ensures that the new franchisee's financial obligations to Itan are met before any obligations to the previous franchisee.

For a prospective franchisee, this means that if they plan to sell their franchise in the future and have extended credit or financing to the buyer, Itan's financial claims will be paid first. It is important for franchisees to understand this subordination requirement and factor it into their financial planning when considering a transfer.