If Itan exercises its purchase option, what happens if I lease the premises?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If we choose to exercise our purchase option, we will notify you of the assets we wish to purchase (the "Acquired Assets") within 20 days after the termination or expiration date.
If we exercise our purchase option we may require that: (i) you assign your lease to us at no additional charge (if you lease the premises); or (ii) you or your affiliate enter into a lease with us upon standard and commercially reasonable leasing terms, including rent at fair rental value, for a term of 10 years or such shorter term that we specify (if you or your affiliate own the real estate).
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if Itan chooses to exercise its option to purchase your salon, and you lease the premises, Itan may require you to assign your lease to them at no additional charge. This means you would transfer your rights and obligations under the lease agreement to Itan, allowing them to take over the premises.
This provision protects Itan's interests by ensuring they can continue operating a salon at the location if they choose to purchase the assets of your franchise. It avoids potential disruptions to the business and allows for a seamless transition if Itan decides to take over the location.
It is important for a prospective Itan franchisee to understand this clause, as it gives Itan significant control over the lease if they exercise their purchase option. Franchisees should carefully review their lease agreement and understand the implications of assigning it to Itan. This is a fairly standard practice in franchising, as it allows the franchisor to maintain control over key locations and ensure brand consistency.