Are Itan franchisees required to obtain any insurance coverage mandated by their lease agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
e our agreement to the contrary, the bond amount may not exceed $1,000. No remedy available to us under this Agreement is exclusive of any other, but may be combined with others under this Agreement, or at Law or in equity, including injunctive relief, specific performance and recovery of monetary damages.
15. YOUR OTHER RESPONSIBILITIES
15.1. Insurance. For your protection and ours, you agree to maintain the following insurance policies:
- (a) "all risk" property insurance, including coverage for fire, vandalism and malicious mischief, with minimum coverage for full replacement cost, covering all assets including inventory, furniture, fixtures, equipment and other property used to operate the Salon;
- (b) comprehensive general liability insurance against claims for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of your Salon, with minimum liability protection of $2,000,000 combined single limit per occurrence and $2,000,000 in the aggregate;
- (c) specialty product liability and personal injury insurance for bodily and personal injury or death caused by or occurring in connection with any treatments received or products purchased at your Salon that are not covered by your general liability insurance, with minimum liability protection of $1,000,000 combined single limit per occurrence and $2,000,000 in the aggregate;
(d) automobile liability and property damage insurance covering all loss, liability, claim or expense of any kind whatsoever resulting from the use, operation, or maintenance of any automobiles or motor vehicles, owned, leased or used by you or your officers, directors, employees, partners or agents in the operation of your Salon, with minimum liability protection of $1,000,000 combined single limit per occurrence;
(e) business interruption insurance providing coverage for 100% of all expenses and financial obligations for a minimum period of 12 months, including fees owed to us, which shall be deemed to include average weekly ro
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees are required to maintain insurance coverage as dictated by their lease agreement, in addition to other specified insurance policies. Specifically, franchisees must obtain "any insurance required under your lease or by Law".
Itan mandates several specific insurance policies for the protection of both the franchisee and the franchisor. These include "all risk" property insurance covering assets like inventory and equipment, comprehensive general liability insurance with a $2,000,000 combined single limit per occurrence and $2,000,000 in the aggregate, and specialty product liability insurance with $1,000,000 combined single limit per occurrence and $2,000,000 in the aggregate. Franchisees must also carry automobile liability insurance with $1,000,000 combined single limit per occurrence, business interruption insurance covering 100% of expenses for at least 12 months, and worker's compensation insurance as required by law.
The requirement to maintain insurance coverage mandated by the lease agreement means that prospective Itan franchisees need to carefully review their lease terms to understand the specific insurance obligations. These obligations can vary depending on the landlord and the location of the salon. It is essential for franchisees to factor in the cost of these additional insurance policies when assessing the overall financial viability of the franchise.
Itan also retains the right to specify additional insurance requirements in its Manual from time to time. This means that franchisees must remain vigilant and adapt to any changes in insurance requirements throughout the term of their franchise agreement. Failing to maintain the required insurance coverage can result in penalties or even termination of the franchise agreement.