What happens to an Itan franchisee's rights and development obligations upon termination of the agreement?

According to Itan's 2025 Franchise Disclosure Document, the termination of the Development Agreement brings an end to all the franchisee's rights and development obligations. This includes the franchisee's interests in the Development Territory and the right to sign new Franchise Agreements or open new salons. Itan will not refund any portion of the development fee if the agreement is terminated.

This means that upon termination, the franchisee loses the right to further develop salons within the designated territory. The franchisee also cannot sign any new franchise agreements under the Development Agreement. The loss of the development fee can be a significant financial hit, especially if the franchisee has not yet recouped their initial investment through operating salons.

This clause is fairly standard in franchise development agreements. It protects Itan's interests by ensuring that a terminated franchisee cannot continue to expand the brand without authorization. Prospective franchisees should carefully consider the implications of this clause and ensure they have a solid plan for meeting their development obligations to avoid potential termination and loss of fees.