What is the Itan franchisee's obligation if their state requires modifications to the franchise documents?
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 governing the franchise relationship and franchise documents, which may necessitate modifications to the 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's terms are only applicable if the franchisee meets the specific requirements of the relevant state, independent of signing the addendum itself. The State Addendum, but only for the applicable state, will override any conflicting provisions in the FDD, Franchise Agreement, or any Supplemental Documents. 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 are obligated to 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 enforced. 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 to the franchisee.
For prospective Itan franchisees, this means it is crucial to understand whether their state requires such modifications and to carefully review the State Addendum if applicable. It ensures that the franchise agreement complies with local laws, protecting both the franchisee and the franchisor. Franchisees should be aware of the specific requirements and implications of the State Addendum for their particular state to avoid any potential legal issues or misunderstandings.