If Itan consents to a transfer, does that waive any claims Itan may have against the transferor?

According to Itan's 2025 Franchise Disclosure Document, Itan's consent to a transfer of the franchise does not constitute a waiver of any claims Itan may have against the transferor. Itan also retains the right to demand that the transferee complies with all the terms of the franchise agreement. This means that even if Itan approves a transfer, the original franchisee (transferor) remains liable for any existing obligations or breaches of the franchise agreement.

For a prospective Itan franchisee, this clause is significant because it clarifies that selling the franchise does not automatically absolve them of past liabilities. If there are any outstanding issues or disputes with Itan, these will not be waived simply because the franchise is transferred to a new owner. The original franchisee could still be held responsible for these issues even after the transfer is complete.

This provision is fairly standard in franchise agreements, as it protects the franchisor's interests by ensuring they can still pursue claims against the original franchisee, regardless of the transfer. It also motivates franchisees to resolve any outstanding issues before attempting to transfer the franchise, to avoid potential future liabilities. Franchisees should seek legal counsel to fully understand the implications of this clause before signing the franchise agreement.