If Itan assigns the Franchise Agreement, does Itan remain liable for obligations incurred before the assignment's effective date?

According to Itan's 2025 Franchise Disclosure Document, Itan can assign the Franchise Agreement without prior notice to the franchisee. However, even after the assignment, Itan remains liable for any obligations it incurred before the assignment's effective date. This means that if Itan had existing financial or contractual responsibilities prior to transferring the agreement to another party, Itan is still responsible for those obligations.

For a prospective Itan franchisee, this clause offers a degree of protection. If Itan were to assign the agreement to a less stable or reliable entity, the franchisee still has recourse against Itan for any unresolved issues that arose before the assignment. This could include issues related to initial training, site selection assistance, or marketing support that Itan committed to provide.

This is a fairly standard provision in franchise agreements. It ensures that the franchisor cannot simply walk away from its prior commitments by assigning the agreement to a third party. Franchisees should still carefully evaluate the financial stability and reputation of any potential assignee, but this clause provides an additional layer of security.

It is important for franchisees to document all interactions and agreements with Itan during the initial phase of the franchise relationship. This documentation could be crucial in establishing Itan's obligations should any disputes arise after the assignment of the Franchise Agreement.