If I or my affiliate own the real estate, can Itan require us to enter into a lease with them?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If we exercise our purchase option we may require that: (i) you assign your lease to us at no additional charge (if you lease the premises); or (ii) you or your affiliate enter into a lease with us upon standard and commercially reasonable leasing terms, including rent at fair rental value, for a term of 10 years or such shorter term that we specify (if you or your affiliate own the real estate).
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if you or your affiliate own the real estate for the Itan salon, Itan may require you to enter into a lease with them under certain conditions. This requirement is tied to Itan exercising a purchase option related to the franchise agreement.
Specifically, if Itan chooses to exercise its purchase option upon the termination or expiration of the franchise agreement, they have the right to require that you or your affiliate enter into a lease with them. The terms of this lease must be standard and commercially reasonable, including rent at fair rental value. The lease term will be for 10 years, or a shorter term if Itan specifies.
This stipulation is important for prospective franchisees who own the real estate where their Itan salon will operate. It means that upon termination or expiration of the franchise agreement, Itan could potentially control the real estate by requiring a lease, impacting the franchisee's long-term control over the location. The franchisee should seek legal counsel to fully understand the implications of this clause and negotiate favorable terms if possible.