What must an Itan franchisee do if they have a bona-fide dispute with a supplier?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If you have a bona-fide dispute with a supplier that you believe justifies non-payment or partial payment, you must promptly notify the supplier of the particulars of your Claim and diligently pursue resolution of the Claim or prosecution of appropriate legal action.
Any trade debt that remains unpaid more than 30 days after its due date constitutes a material breach of this Agreement unless, before the end of the 30-day period: (i) you and the supplier agree to alternative payment terms; or (ii) you initiate appropriate legal action to contest the trade debt.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if a franchisee has a legitimate dispute with a supplier that justifies not paying or only partially paying, the franchisee must promptly inform the supplier about the specifics of their claim. They must also actively work to resolve the claim or pursue appropriate legal action.
Itan emphasizes the importance of timely payments to system suppliers, as failure to do so could harm the supplier's relationship with Itan and other franchisees. It could also lead to the supplier terminating their relationship with Itan, which could negatively impact the entire franchise system.
Furthermore, any trade debt that remains unpaid for more than 30 days after the due date is considered a material breach of the Franchise Agreement. However, this can be avoided if, before the 30-day period ends, the franchisee and supplier agree to alternative payment terms, or the franchisee initiates legal action to contest the debt. This highlights the importance of communication and proactive measures in resolving payment disputes to maintain a good standing with Itan and its suppliers.