What happens if an Itan franchisee has 3 or more default notices in a 12-month period?

According to Itan's 2025 Franchise Disclosure Document, if Itan sends a franchisee three or more default notices within a 12-month period, even if the franchisee cures each default, Itan has grounds to terminate the franchise agreement. This is considered a material event of default.

This clause means that Itan franchisees must maintain consistent compliance with the franchise agreement. Even if a franchisee corrects each issue that leads to a default notice, multiple notices within a year can still lead to termination. This could create significant financial and operational disruption for the franchisee.

Itan also has the option to cease performing its obligations under the agreement once a default notice is sent, until the franchisee resolves the breach. However, Itan will not cease performing its obligations if doing so would make it materially harder for the franchisee to correct the breach. Franchisees should aim to resolve any issues promptly to avoid multiple default notices and potential termination.