Following the termination, expiration, or transfer of the Itan franchise agreement, what post-term covenants must the franchisee comply with?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
receipt of a default notice.
If we send you a default notice we may cease to perform our obligations under this Agreement until you cure the breach, unless our failure to perform would materially impair your ability to cure.
20.3. By Mutual Agreement. If you and we mutually agree in writing to terminate this Agreement, any notice or cure period that might otherwise apply shall be deemed waived.
21. POST-TERM OBLIGATIONS.
21.1. Obligations of You and the Owners. After the termination, expiration or Transfer of this Agreement, you and the Owners agree to:
- (a) immediately cease use of the Intellectual Property;
- (b) comply with all post-term covenants described in §14 or a Franchise Owner Agreement;
- (c) cancel all fictitious or assumed name registrations relating to your use of the Marks;
- (d) pay us all amounts you owe including, if applicable, liquidated damages pursuant to §21.3;
- (e) comply with our data retention policies relating to Business Data;
- (f) transfer Customer Data (and, if we so request, assign all customer contracts) to us or our designee;
(g) comply with our instructions to return, destroy or transfer all copies of the Manual and Copyrighted Materials and all signs, brochures, advertising and promotional materials, forms and other materials bearing the Marks or containing Confidential Information;
(h) alter the interior and exterior of the premises to the extent necessary, or to the extent we require, to prevent any further resemblance to or connection with a Salon or our System, including repainting the exterior and interior with new colors and removing trade dress, fixtures, signage, window decals and décor items associated with a Salon;
(i) notify all telephone, listing and domain name registration companies of the termination or expiration of your right to use: (i) any telephone numbers and/or domain names associated with your Salon; and (ii) any regular, classified or other telephone directory listings associated with the Marks (you hereby authorize the foregoing companies to transfer such telephone numbers, domain names and listings to us and you authorize us, and appoint us and any officer we designate as your attorney-in-fact to direct these companies to transfer the telephone numbers, domain names and listings to us if you fail or refuse to do so);
(j) provide us with satisfactory evidence of your compliance with the above obligations within 30 days after the effective date of the termination, expiration or Transfer of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, after the termination, expiration, or transfer of the Franchise Agreement, both the franchisee and any owners must adhere to specific obligations. These include immediately ceasing all use of Itan's intellectual property, complying with all post-term covenants described in Section 14 of the agreement or a Franchise Owner Agreement, and canceling any assumed name registrations related to the use of Itan's marks.
Additionally, franchisees must pay all outstanding amounts owed to Itan, including any applicable liquidated damages as outlined in Section 21.3. Compliance with Itan's data retention policies regarding business data is also required, along with the transfer of customer data (and, if requested by Itan, the assignment of all customer contracts) to Itan or its designee.
Section 14 further details brand protection covenants, emphasizing that the franchisee and owners must protect Itan's intellectual property and franchise system. This includes refraining from using any intellectual property or confidential information in any business other than the operation of their Itan salon, maintaining the confidentiality of Itan's confidential information, and preventing unauthorized use or disclosure of this information. Franchisees and owners must also cease using Itan's intellectual property and confidential information immediately upon the expiration, termination, or transfer of the Franchise Agreement.
These post-term obligations are designed to protect Itan's brand and proprietary information, ensuring that former franchisees do not unfairly compete using the knowledge and resources gained during their time with the franchise. Franchisees should carefully review Sections 14 and 21 of the Franchise Agreement to fully understand the scope of these restrictions and obligations.