For Itan franchises, does the anti-terrorism compliance extend to the owner's related parties?
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. The foregoing representations and warranties are 'continuing' representations and warranties for the duration of the franchise relationship. Accordingly, you must immediately notify us of the occurrence of an event or development of a circumstance that might render any of the foregoing representations and warranties false, inaccurate or misleading.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the anti-terrorism compliance extends to the owner's related parties. Specifically, the franchisee and any owners must represent and warrant that neither they, nor any of their funding sources (including legal or beneficial owners of equity interest) or related parties, have ever been a terrorist or suspected terrorist, or identified on any Terrorist List. This includes the list of "Specially Designated Nationals" or "Blocked Persons" maintained by the U.S. Treasury Department's Office of Foreign Assets Control.
This requirement means that prospective Itan franchisees and their owners must ensure that they, their funding sources, and related parties are not in violation of any anti-terrorism laws. This extends beyond just the franchisee and includes anyone with a financial stake or close association. Itan franchisees must comply with all U.S. laws that prohibit corrupt business practices, money laundering, or support for those who conspire to commit acts of terror.
Furthermore, these representations and warranties are continuing for the duration of the franchise relationship. This means that an Itan franchisee has an ongoing obligation to monitor compliance and immediately notify Itan if any event or circumstance arises that could render these representations false, inaccurate, or misleading. This places a significant responsibility on the franchisee to conduct due diligence not only at the outset but throughout the term of the franchise agreement.
This level of scrutiny is not uncommon in franchising, particularly for brands that want to protect their reputation and ensure compliance with all applicable laws. Prospective franchisees should be prepared to provide detailed information about their ownership structure, funding sources, and related parties to satisfy Itan's requirements.