Is the Itan franchisee required to reimburse commission paid to a broker who finds the transferee?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ee pays us any applicable training fee;
- (d) the transferee and its owners sign our then-current form of area development agreement (unless we, in our sole discretion, instruct you to as
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if a franchisee seeks to transfer their rights, they or the transferee may have to reimburse Itan for broker commissions. Specifically, in addition to a $10,000 transfer fee, the franchisee must reimburse Itan for any commission they pay to their broker if the broker finds the transferee. This condition applies when transferring either an area development agreement or a franchise agreement.
This means that when a franchisee wants to sell their Itan franchise to a new owner, they need to be prepared to cover not only the $10,000 transfer fee payable to Itan, but also any commission that Itan pays to a broker who helped find the buyer. This could add a significant, potentially unpredictable, cost to the transfer process.
It is important for prospective Itan franchisees to understand this potential expense, as it can impact the financial viability of selling their franchise in the future. Franchisees should consider this factor when evaluating the overall costs and benefits of investing in an Itan franchise. They may also want to discuss with Itan what typical broker commission rates are, or negotiate a cap on the amount of commission they would be responsible for reimbursing.