If applicable law prevents an Itan franchisee from assigning ownership of an Improvement, what must the franchisee do?

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 perpetually license the Improvement to Itan, free of charge. This license grants Itan full rights to use, commercialize, and sublicense the Improvement.

This requirement ensures that Itan can still benefit from any Improvements developed by its franchisees, even if legal restrictions prevent a formal transfer of ownership. By obtaining a perpetual, free license with full rights, Itan maintains control over the use and commercialization of these Improvements across its franchise system.

For a prospective Itan franchisee, this means that any innovation or Improvement they develop related to the Itan salon operation must be made available to the franchisor. While the franchisee might not be able to assign ownership, the perpetual license ensures Itan can leverage the Improvement without incurring additional costs. Franchisees should consider this when investing in or developing new technologies or processes for their Itan salon.