What is the Itan franchisee's obligation regarding compliance with laws?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
You and the Owners jointly and severally represent and warrant to us that, to the best of your and their knowledge: (a) no property or interest owned by you or any Owner is subject to being "blocked" under any Anti-Terrorism Law; (b) neither you nor any Owner, nor any of their respective funding sources (including any legal or beneficial owner of an Equity Interest in the Business or Franchisee Entity) or related parties is, or has ever been: (i) a terrorist or suspected terrorist within the meaning of the Anti-Terrorism Law; or (ii) identified by name, alias, pseudonym, nickname or address on any Terrorist List, including the list of "Specially Designated Nationals" or "Blocked Persons" maintained by the U.S.
Treasury Department's Office of Foreign Assets Control (texts currently available at www.home.treasury.gov); and (c) you and the Owners are in compliance with, and shall continue to comply with, the Anti-Terrorism Law and all other U.S.
Laws currently in effect, or enacted in the future, that prohibit corrupt business practices, money laundering or the aid or support of Persons who conspire to commit acts of terror against any Person or government.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees and their owners must comply with anti-terrorism laws and all other U.S. laws currently in effect, or enacted in the future, that prohibit corrupt business practices, money laundering, or the aid or support of persons who conspire to commit acts of terror against any person or government. This obligation extends to ensuring that neither the franchisee nor any owner, nor any of their respective funding sources, is a terrorist or suspected terrorist, or identified on any Terrorist List maintained by the U.S. Treasury Department's Office of Foreign Assets Control.
This requirement means that prospective Itan franchisees must conduct thorough due diligence to ensure they, their owners, and their funding sources are not in violation of any anti-terrorism or anti-corruption laws. This includes staying informed about changes to U.S. laws and regulations related to these issues and implementing procedures to prevent any potential violations.
Failure to comply with these laws could result in severe legal and financial consequences for the franchisee, including fines, penalties, and potential termination of the franchise agreement. It is crucial for franchisees to maintain ongoing compliance and seek legal counsel if they have any questions or concerns about their obligations under these laws. This is a standard requirement in franchising, as franchisors need to protect their brand and reputation from any association with illegal activities.