What must an Itan franchisee sign if they renew or transfer their Franchise?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
"Successor Agreement" means our then-current form of iTAN Franchise Agreement you must sign pursuant to §4.2 in connection with a renewal of your franchise rights.
4. TERM AND RENEWAL.
4.1. Generally. This Agreement grants you the right to operate your Salon during the Term. You may renew your franchise rights by signing a Successor Agreement for a five (5) year renewal term. You may enter into a maximum of two (2) Successor Agreements. The parties may agree to further renewals after expiration of the second (2nd) renewal term, but neither party is obligated to do so (unless required by applicable Law, in which case the same renewal terms and conditions set forth in this Agreement shall apply to subsequent renewals). In order to sign a Successor Agreement you must satisfy all renewal conditions specified in this Agreement or the Successor Agreement you wish to renew, as applicable. The Successor Agreement shall be the current form of franchise agreement we use to grant franchises as of the expiration of the Term or renewal term, as applicable, the terms of which may vary materially and substantially from the terms of this Agreement. Upon renewal, we reserve the right to modify the boundaries of your Territory in accordance with our then-current territory guidelines and criteria. If this Agreement is a Successor Agreement, the Term of this Agreement and your remaining renewal rights, if any, shall be governed by your original franchise agreement
4.2. Renewal Requirements. In order to renew, you and the Owners (as applicable) must:
- (a) send us a notice of your intent to enter into a Successor Agreement not less than 240 days nor more than one (1) year before the expiration of the Term or renewal term, as applicable;
- (b) not be in default under any Definitive Agreement at the time you send the renewal notice or sign the Successor Agreement;
- (c) sign the Successor Agreement and all ancillary documents we require franchisees to sign;
- (d) sign a General Release;
- (e) pay us a $1,000 renewal fee;
- (f) remodel the Salon and upgrade all furniture, fixtures and equipment to conform to our thencurrent standards and specifications; and
- (g) extend the term of your lease for the duration of the renewal term.
(j) you and your Owners sign a General Release;
(k) you agree to subordinate the transferee's financial obligations to you to the transferee's financial obligations owed to us pursuant to the franchise agreement (we may require you to enter into a written subordination agreement);
(l) we choose not to exercise our right of first refusal described in §19.5; and
(m) you or the transferring Owner, as applicable, and the transferee satisfy all other conditions we reasonably require as a condition to approval of the Transfer.
You and the Owners (and transferee) must sign all documents we reasonably request to effectuate and document the Permitted Transfer.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, to renew a franchise, a franchisee must sign a Successor Agreement, which is the current form of the franchise agreement used at the time of renewal. The terms of the Successor Agreement may differ significantly from the original agreement. Franchisees can renew for a five-year term and may enter into a maximum of two Successor Agreements. Further renewals can be agreed upon, but neither party is obligated unless required by law.
To initiate a renewal, the franchisee must send a notice of intent to enter into a Successor Agreement between 240 days and one year before the current term expires. At the time of sending the renewal notice and signing the Successor Agreement, the franchisee must not be in default under any Definitive Agreement. Additionally, the franchisee must sign all ancillary documents required by Itan, sign a General Release, pay a $1,000 renewal fee, remodel the salon to meet current standards, and extend the lease for the renewal term.
For transferring a franchise, the franchisee and the owners must sign a General Release. They must also agree to subordinate the transferee's financial obligations to the transferor's financial obligations owed to Itan under the franchise agreement, potentially requiring a written subordination agreement. Itan retains the right of first refusal and may require the franchisee or transferring owner and the transferee to satisfy other conditions for transfer approval. Furthermore, the franchisee and owners (and transferee) must sign all documents Itan reasonably requests to effectuate and document the Permitted Transfer.