What happens if an Itan owner attempts a transfer without approval?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ies created by this Agreement are personal to you and the Owners. We are granting you franchise rights in reliance upon the character, skill, attitude, business ability and financial resources of you and your Owners. Because this Agreement is a personal services contract, neither you nor any Owner may engage in a Transfer (other than a Permitted Transfer) without our prior approval. Any Transfer (other than a Permitted Transfer) without our approval is void and constitutes a breach of this Agreement. We will not unreasonably withhold our approval of a proposed Transfer if all of the following conditions are satisfied:
- (a) we believe the proposed transferee has sufficient business experience, aptitude and financial resources to own and operate a Salon and meets our minimum criteria for franchisees;
- (b) you and your affiliates and Owners are in full compliance with all Definitive Agreements;
- (c) the transferee's owners successfully complete, or make arrangements to attend, the initial training program and the transferee pays any applicable training fee (the transfer fee covers training for one (1) Person);
- (d) your landlord consents to the assignment of your lease to the transferee, or the transferee is diligently pursuing an approved substitute location within the Site Selection Area;
- (e) the transferee and its owners obtain all licenses and permits required by applicable Law to own and operate the Salon;
- (f) the transferee: (i) agrees to discharge and guarantee your obligations under this Agreement and any other Business contracts (including customer contracts/obligations and supplier contracts); and (ii) signs any agreement we require to confirm the foregoing;
- (g) the transferee and its owners sign our then-current form of franchise agreement (unless we instruct you to assign this Agreement to the transferee) except that: (i) the Term and renewal term(s) shall be the Term and renewal term(s) remaining under this Agreement unless we specify otherwise; and (ii) the transferee need not pay a separate initial franchise fee;
- (h) the transferee agrees to remodel the Salon and upgrade all furniture, fixtures and equipment to conform to our then-current standards and specifications (these changes m
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, any transfer of the franchise that is not a permitted transfer and is done without Itan's approval is considered void and constitutes a breach of the franchise agreement. This means that the transfer will not be recognized by Itan, and the franchisee will be in violation of their agreement.
Itan outlines specific conditions under which they will not unreasonably withhold approval for a transfer. These conditions include ensuring the proposed transferee has sufficient business experience, aptitude, and financial resources, and that both the current franchisee and the proposed transferee are in full compliance with all agreements. The transferee must also complete the initial training program and obtain all necessary licenses and permits.
Furthermore, the transferee must agree to uphold the obligations of the original agreement, remodel the salon to meet current standards within 12 months, and sign the current form of the franchise agreement. A $10,000 transfer fee is also required to cover Itan's expenses related to the transfer. Both the franchisee and their owners must sign a General Release. Meeting these conditions increases the likelihood of Itan approving the transfer, avoiding a breach of contract.