If Itan cures a breach on behalf of the franchisee, what obligation does the franchisee have?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If you fail to cure a breach before the expiration of the cure period (if any) and we take steps to cure the breach (for example, obtaining required insurance coverage on your behalf or paying amounts you owe to system suppliers), then you must reimburse all costs and expenses we directly or indirectly incur in connection with our efforts to cure the default. Your payment of noncompliance fees and default expense reimbursements does not preclude us from terminating this Agreement in accordance with §20 if the default continues after we collect these amounts.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if a franchisee fails to cure a breach within the prescribed time, and Itan takes steps to resolve the breach on the franchisee's behalf, the franchisee must reimburse Itan for all costs and expenses Itan incurs, directly or indirectly, in curing the default.
This means that if Itan pays for something like insurance coverage that the franchisee was required to have or pays amounts the franchisee owes to system suppliers, the franchisee is responsible for paying Itan back for those expenses. This obligation arises from the franchise agreement and is in addition to any noncompliance fees that Itan may impose.
It is important to note that even if the franchisee reimburses Itan for these costs, Itan still retains the right to terminate the franchise agreement if the default continues. Therefore, franchisees must address breaches promptly and effectively to avoid further financial obligations and potential termination of their franchise agreement.