If applicable law precludes you from assigning ownership of an Improvement to Itan, what happens?

According to Itan's 2025 Franchise Disclosure Document, if applicable law prevents a franchisee from assigning ownership of an improvement to Itan, the franchisee must grant Itan a perpetual, royalty-free license to use, commercialize, and sublicense the improvement in any manner Itan deems appropriate. This ensures that Itan can still benefit from the improvement even if ownership cannot be transferred.

This means that while the franchisee might retain legal ownership in such a scenario, Itan gains unrestricted rights to utilize the improvement for its benefit and the benefit of the franchise system. The franchisee would not receive any royalties or fees for Itan's use of the improvement.

This clause is important for prospective Itan franchisees to understand, as any innovation or improvement they develop for their salon could be utilized by Itan and the entire franchise network without additional compensation to the franchisee, even if the franchisee technically retains ownership due to legal restrictions.