If an Itan developer or owner wishes to engage in a transfer, does Itan have a right of first refusal?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If you or an Owner wish to engage in a Transfer, you or the Owner, as applicable, must obtain and send us a bona-fide offer executed by the purchaser after completion of due diligence.
We have 30 days after receiving the offer to decide whether to purchase the interest for the same price and upon the same terms contained in the offer, except we may substitute cash for any non-cash form of payment proposed in the offer.
If we notify you within the 30-day period that we intend to purchase the interest, you or the Owner, as applicable, must sell the interest to us.
We will have an additional 60 days to prepare for closing.
You or the Owner, as applicable, must provide us with all customary representations and warranties regarding the title to and condition of the assets or Equity Interest that we purchase, or at our option, the representations and warranties contained in the offer.
If we do not exercise our right of first refusal, you or the Owner, as applicable, may complete the Transfer to the purchaser pursuant to the terms of the offer, subject to the requirements of §19.2, including our approval of the transferee.
If the sale is not completed within 120 days after we receive the offer, or there is a material change to the terms of sale, we will again have the right of first refusal specified in this Section.
Our right of first refusal shall not apply to a Permitted Transfer.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan does have a right of first refusal if a developer or owner wishes to transfer their interest, but this right does not apply to Permitted Transfers. If an Itan developer or owner wants to transfer their interest, they must first obtain a legitimate offer from a potential buyer after the buyer has completed their due diligence. This offer must then be presented to Itan.
Itan then has 30 days to decide whether to purchase the interest themselves, matching the price and terms of the offer. However, Itan can substitute cash for any non-cash payment proposed in the offer. If Itan decides to purchase the interest, the developer or owner is obligated to sell it to them, and Itan has an additional 60 days to prepare for the closing. The seller must provide standard representations and warranties regarding the title and condition of the assets or equity interest being purchased, or at Itan's option, the representations and warranties contained in the offer.
If Itan chooses not to exercise their right of first refusal, the developer or owner can proceed with the transfer to the original purchaser, subject to meeting other requirements, including Itan's approval of the new transferee. However, if the sale is not completed within 120 days after Itan receives the offer, or if there is a material change to the terms of the sale, Itan's right of first refusal is reinstated. This process ensures that Itan maintains control over who enters their franchise system and protects their interests in the event of a transfer.