In the Itan franchise agreement, what constitutes an event of Force Majeure?

According to Itan's 2025 Franchise Disclosure Document, Force Majeure events are defined as acts or circumstances beyond a party's control. These include specific events such as fire, storm, flood, earthquake, explosion, or accident, as well as acts of war or terrorism, rebellion, insurrection, sabotage, epidemic, failures or delays of transportation, and strikes. However, there are several important conditions and exclusions.

To qualify as Force Majeure, the non-performing party must promptly notify the other party of the event and demonstrate that they were without fault and could not have prevented the delay or failure through reasonable precautions. Critically, Force Majeure does not excuse or permit any delay or failure to pay fees or other amounts owed to Itan on the applicable due date. Additionally, insolvency, lack of required funds or financing, currency fluctuations, currency devaluations, foreign exchange controls, or inflation are explicitly excluded from being considered Force Majeure events.

Furthermore, the definition addresses epidemics and pandemics, stating that while they generally do not constitute Force Majeure, an exception exists if a Governmental Authority mandates the closure (or prevents the opening) of the Itan salon as a direct result of such an epidemic or pandemic. This specific carve-out provides some protection for franchisees in situations where government-mandated closures occur due to public health crises, but it does not cover economic or financial changes resulting from such events.