Does the Itan franchise agreement allow for unilateral modification of brand protection covenants?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Although you and we both believe the covenants in this Agreement are reasonable, we may at any time unilaterally modify the terms of the brand protection covenants in §3 of this Agreement, upon written notice to you, by limiting the scope of the Prohibited Activities, narrowing the definition of a Competing Business, shortening the duration of the Restricted Period, reducing the geographic scope of the Restricted Territory and/or reducing the scope of any other covenant imposed upon you under §3 of this Agreement to ensure that the covenants are enforceable under applicable law.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan retains the right to modify the brand protection covenants unilaterally. Specifically, Itan may modify the terms in Section 3 of the Brand Protection Agreement. However, these modifications must be made in writing and delivered to the franchisee.
These modifications are limited to actions that would reduce the burden on the franchisee. Itan can limit the scope of prohibited activities, narrow the definition of a competing business, shorten the restricted period, reduce the geographic scope of the restricted territory, and/or reduce the scope of any other covenant imposed upon the franchisee.
The purpose of these modifications is to ensure that the covenants are enforceable under applicable law. While Itan believes the covenants are reasonable, this clause allows them to adjust the covenants if necessary to maintain their legal standing. This protects both Itan and the franchisee by ensuring the covenants remain valid and enforceable.