What happens if an Itan franchisee or owner engages in a Prohibited Activity during the Post-Term Restricted Period?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If you engage in any Prohibited Activity during the Restricted Period (other than having an interest in a Competing Business permitted by this Section) your Restricted Period will be extended by the period of time during which you engaged in the
Prohibited Activity. Any such extension of time will not constitute a waiver of your breach or impair any of our rights or remedies relating to your breach. For purposes of clarity, you remain bound by any non-competition covenants in other Definitive Agreements that remain in effect for a period of time that extends beyond the expiration of the Restricted Period under this Agreement, and the expiration of the Restricted Period under this Agreement does not in any way diminish your obligation to comply with such other covenants.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to the 2025 Itan FDD, if a franchisee or owner engages in a Prohibited Activity during the Post-Term Restricted Period (other than having an interest in a Competing Business permitted by this Section), the Restricted Period will be extended. The extension will be for the length of time that the franchisee or owner was engaged in the Prohibited Activity.
This extension does not constitute a waiver of the breach, nor does it impair any of Itan's rights or remedies relating to the breach. This means that Itan still retains the right to pursue legal action or other remedies for the initial breach of the agreement, even as the Restricted Period is extended.
It is important to note that the franchisee remains bound by any non-competition covenants in other Definitive Agreements that remain in effect for a period of time that extends beyond the expiration of the Restricted Period under the Franchise Agreement. The expiration of the Restricted Period under the Franchise Agreement does not diminish the franchisee's obligation to comply with such other covenants.