What is the Itan franchisee's obligation if their state requires modifications to the Franchise Agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Certain states have laws governing the franchise relationship and franchise documents. Certain states require modifications to the FDD, Franchise Agreement, Supplemental Agreements and other documents related to the sale of a franchise. This State-Specific Addendum ("State Addendum") will modify these agreements to comply with the applicable state's laws. The terms of this State Addendum will only apply if you meet the requirements of the applicable state independently of your signing of this State Addendum. The terms of this State Addendum (but only the State Addendum for the applicable State) will override any inconsistent provision of the FDD, Franchise Agreement or any Supplemental Documents. This State Addendum only applies to the following states: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
If your state requires these modifications, you will sign this State Addendum along with the Franchise Agreement and any Supplemental Agreements. If you sign this State Addendum, only the terms applicable to the state or states whose franchise laws apply to your transaction will govern. If you sign this State Addendum, but none of the state franchise laws listed above applies because their jurisdictional requirements have not been met, then this State Addendum will be void and inapplicable to you.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, certain states have laws that govern franchise relationships and documents, potentially requiring modifications to the Franchise Disclosure Document (FDD), Franchise Agreement, Supplemental Agreements, and other related documents. To address this, Itan uses a State-Specific Addendum ('State Addendum') to ensure compliance with applicable state laws. This addendum modifies the agreements as needed, and its terms will override any conflicting provisions in the FDD, Franchise Agreement, or Supplemental Documents, but only if the franchisee meets the requirements of the specific state independently of signing the State Addendum. The State Addendum applies specifically to California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
If a franchisee's state requires these modifications, they must sign the State Addendum along with the Franchise Agreement and any Supplemental Agreements. However, only the terms applicable to the state whose franchise laws govern the transaction will be in effect. If the franchisee signs the State Addendum, but the jurisdictional requirements of the listed state franchise laws are not met, the State Addendum becomes void and inapplicable.
For prospective Itan franchisees, this means that the franchise agreement and related documents may be subject to change based on the state in which they are operating. It is crucial to carefully review the State Addendum, if applicable, to understand any modifications to the standard franchise agreement. Franchisees should also ensure they meet all jurisdictional requirements of their state's franchise laws to ensure the State Addendum is valid and enforceable. This process ensures that Itan franchises comply with local regulations, but it also places the onus on the franchisee to understand and adhere to these state-specific requirements.