What is the Itan franchisee's responsibility regarding the disclosure document in California?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a Franchise Agreement or Supplemental Agreement restricting venue to a forum outside the State of California.
The Franchise Agreement and Supplemental Agreements require application of the laws of California.
This provision may not be enforceable under California law.
The Franchise Agreement and Supplemental Agreements may provide for termination upon bankruptcy.
Any such provision may not be enforceable under federal bankruptcy law (11 U.S.C.A.
Sec. 101 et seq.).
The Franchise Agreement and Supplemental Agreements may contain a covenant not to compete which extends beyond the termination of the franchise.
This provision may not be enforceable under California law.
Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
Any such provisions contained in the Franchise Agreement or Supplemental Agreements may not be enforceable.
California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination, transfer, or non-renewal of a franchise.
If the Franchise Agreement or Supplemental Agreements contain a provision that is inconsistent with the California Franchise Investment Law, the California Franchise Investment Law will control.
You must sign a general release of claims if you renew or transfer your Franchise.
California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516).
Business and Professions Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION & INNOVATION.
ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION & INNOVATION AT https://dfpi.ca.gov/.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, prospective franchisees in California are encouraged to seek independent legal counsel to understand how California and federal laws apply to specific provisions within the Franchise Agreement or Supplemental Agreements, especially those that restrict venue to a forum outside of California.
The FDD states that the Franchise Agreement and Supplemental Agreements require application of California laws, but this may not always be enforceable under California law. Additionally, any provisions in the Franchise Agreement or Supplemental Agreements that allow for termination upon bankruptcy may not be enforceable under federal bankruptcy law. Similarly, covenants not to compete that extend beyond the termination of the franchise may not be enforceable under California law.
The disclosure also points out that under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable. Furthermore, California Business and Professions Code Sections 20000 through 20043 provide specific rights to franchisees concerning termination, transfer, or non-renewal, and these sections will take precedence if there are inconsistencies with the Franchise Agreement or Supplemental Agreements. If a franchisee renews or transfers their franchise, they will be required to sign a general release of claims; however, California Corporations Code Section 31512 voids any waiver of rights under the Franchise Investment Law, and Business and Professions Code Section 20010 voids any waiver of rights under the Franchise Relations Act.
Finally, the Itan FDD notes that the website has not been reviewed or approved by the California Department of Financial Protection & Innovation, and any complaints about the website's content can be directed to that department.