What is the Itan franchisee's obligation regarding the operation of a salon?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
n);
- (c) the Development Business you conduct pursuant to this Agreement (or any interest therein);
- (d) the right to manage a Salon or occupy the Salon's premises; or
- (e) an Equity Interest in the Developer Entity, including public and private offerings;
including by: merger or consolidation; judicial award, order or decree; issuance of additional Equity Interests (including public and private offerings); foreclosure of a security interest by a lender; or operation of Law, will or a trust upon an Owner's death (including via the Laws of intestate succession).
- 2. GRANT OF DEVELOPMENT RIGHTS. Subject to the terms of this Agreement, we hereby grant you (a) the right and obligation to develop, open and operate each of the Required Salons referred to in the Development Schedule; and (b) the option, but not the obligation, to develop, open and operate one (1) or more Optional Salons during the Term in accordance with §4.2. All Salons developed pursuant to this Agreement (including Optional Salons and Required Salons) must be located within the Development Territory. This Agreement does not grant you any right or license to use our Intellectual Property.
- 3. TERRITORIAL PROTECTIONS AND LIMITATIONS. During the Term we will not develop or operate, or license a third party to develop or operate, a Salon that is physically located within the Development Territory other than: (a) any Salon that is operating, under development, or for which a franchise agreement has been executed, in each case as of the Effective Date, and that is (or will be) located within the Development Territory; and (b) any Salon otherwise permitted by this Section. At any time during the Term we reserve the right to engage in Acquisitions that involve, or subsequently result in, conversion of the acquired or acquiring company's outlets to ITAN® Salons, even if those outlets are located in the Development Territory. We reserve the right to sell, and license third parties to sell, competitive or identical goods and services (including under the Marks) within the Development Territory through Alternative Channels of Distribution.
4. DEVELOPMENT OBLIGATIONS
- 4.1. Required Salons. You must develop, open and operate all Required Salons listed in the Development Schedule. You must develop and open each Required Salon in strict compliance with the opening dates set forth in the Development Schedule. The opening date listed in the Development Schedule for a given Required Salon may be earlier than the opening date required under the terms of the associated Franchise Agreement. In order to comply with the Development Schedule you must open each Required Salon by the opening date listed in the Development Schedule even if such date is earlier than the opening date required by the associated Franchise Agreement. If a Force Majeure event occurs that directly prevents you from opening a Required Salon on or prior to the required opening date set forth in the Development Schedule, the opening date may be extended in accordance with §13.5 for such period of time that is reasonable in light of the nature of the Force Majeure event (not to exceed 180 days).
- 4.2. Optional Salons. If (a) you develop and open all Required Salons prior to the expiration of the Term of this Agreement and (b) you and your affiliates have substantially complied with the Development Schedule and all Definitive Agreements, then you shall have the option, but not the obligation, to develop one (1) or more additional Salons within the Development Territory during the remainder of the Term (each, an "Optional Salon").
- 4.3. Reasonableness of Development Schedule. You represent that you: (a) have conducted your own independent investigation and analysis of the prospects for development of the Required Salons in the Development Territory; (b) approve the Development Schedule as being reasonable and viable; and (c) recognize that a breach of the Development Schedule is a material breach of this Agreement.
5. DEVELOPMENT AND OPERATION OF SALONS
- **5.1.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to the 2025 Itan Franchise Disclosure Document, franchisees have specific obligations regarding the development, opening, and operation of their salons. The franchisee is granted the right and obligation to develop, open, and operate the Required Salons as outlined in the Development Schedule. They also have the option to develop, open, and operate one or more Optional Salons during the term of the agreement, provided it aligns with specified guidelines. All salons developed under the agreement, whether Required or Optional, must be located within the Development Territory.
Itan franchisees are required to adhere to Itan's System for operating a salon, which includes distinctive interior and exterior designs, proprietary retail products and equipment, high-quality tanning services, comprehensive training programs, and specific advertising and marketing strategies. Franchisees must also follow the Brand Standards Manual, which contains confidential standards for salon operations. This ensures uniformity and consistency across all Itan locations, maintaining brand integrity.
For franchisees converting an existing business to an Itan salon, there are additional obligations. They must re-image, remodel, renovate, refurbish, and modernize the premises to comply with all standards and specifications in the Manual. This includes design and layout, construction materials, furniture, fixtures and equipment, and interior and exterior signage. Franchisees are generally responsible for covering these conversion costs, though Itan may limit required remodeling to reduce expenses. The franchisee must also hire a licensed and bonded architect to prepare construction plans that meet Itan's standards and comply with all applicable laws.
It is important to note that franchisees cannot use Itan's Marks to promote the upcoming conversion of their business until they receive a written "Certificate of Conversion Completion" from Itan. This certificate confirms that the franchisee has met all conversion requirements and that the premises are ready to operate as an Itan salon. Additionally, if the franchisee leases the premises, they may need to modify the lease to ensure a term of at least 10 years from the Conversion Date and obtain a Lease Addendum, which may be required before the Franchise Agreement is executed.