Where can an Itan franchisee develop Optional Salons?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
n);
- (c) the Development Business you conduct pursuant to this Agreement (or any interest therein);
- (d) the right to manage a Salon or occupy the Salon's premises; or
- (e) an Equity Interest in the Developer Entity, including public and private offerings;
including by: merger or consolidation; judicial award, order or decree; issuance of additional Equity Interests (including public and private offerings); foreclosure of a security interest by a lender; or operation of Law, will or a trust upon an Owner's death (including via the Laws of intestate succession).
- 2. GRANT OF DEVELOPMENT RIGHTS. Subject to the terms of this Agreement, we hereby grant you (a) the right and obligation to develop, open and operate each of the Required Salons referred to in the Development Schedule; and (b) the option, but not the obligation, to develop, open and operate one (1) or more Optional Salons during the Term in accordance with §4.2. All Salons developed pursuant to this Agreement (including Optional Salons and Required Salons) must be located within the Development Territory.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, a franchisee has the option to develop Optional Salons within their designated Development Territory. However, this option is only available if the franchisee has successfully developed and opened all Required Salons as per the Development Schedule, and has substantially complied with the Development Schedule and all Definitive Agreements. The number of Optional Salons a franchisee can develop is one or more, subject to these conditions and the remaining Term of the agreement.
It is important to note that all Salons, including both Required and Optional Salons, must be located within the Development Territory specified in the agreement. However, the agreement does not grant the franchisee any right or license to use Itan's Intellectual Property beyond what is necessary for the operation of the franchised salons. Itan also retains the right to engage in acquisitions that may result in the conversion of other company's outlets to Itan Salons, even within the franchisee's Development Territory. Furthermore, Itan reserves the right to sell or license third parties to sell competitive goods and services within the Development Territory through Alternative Channels of Distribution.
In practical terms, this means that while an Itan franchisee has the potential to expand their business by opening Optional Salons, their primary focus must be on fulfilling the initial obligations of developing and opening the Required Salons on schedule. The franchisee's ability to open Optional Salons is contingent upon their successful completion of these initial obligations and adherence to the terms of the agreement. Additionally, the franchisee should be aware of Itan's rights to engage in acquisitions and alternative distribution channels within their territory, which could potentially impact their business.