In the Itan franchise agreement, what is the 'Restricted Territory'?

According to Itan's 2025 Franchise Disclosure Document, the Restricted Territory is defined as the geographic area within a 10-mile radius of both the franchisee's salon (including its premises) and all other Itan salons that are operating or under construction when the post-term restricted period begins. This means that after the franchise agreement ends, the franchisee is generally restricted from operating a competing business within this defined area.

However, there is a caveat. If a court determines that this 10-mile radius is too broad to be enforceable, the Restricted Territory will then be defined as the geographic area within a 10-mile radius solely from the franchisee's former Itan salon, including the salon's premises. This adjustment accounts for potential legal challenges to the enforceability of the original restricted territory definition.

For a prospective Itan franchisee, this definition is crucial because it outlines the area where they will be restricted from operating a competing business after their franchise agreement terminates. It is important to note the potential for the restricted territory to be modified by a court, which could impact the franchisee's future business opportunities. Franchisees should seek legal counsel to understand the implications of this clause and its enforceability in their specific jurisdiction.