If an Itan franchisee sells through the internet, is that considered an Alternative Channel of Distribution?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
During the Term we will not develop or operate, or license a third party to develop or operate, a Salon that is located in the Territory except as otherwise provided in this Section with respect to Acquisitions. At any time during the Term we reserve the right to engage in Acquisitions that involve, or subsequently result in, conversion of the acquired or acquiring company's outlets to ITAN™ Salons, even if those outlets are located in your Territory. We reserve the right to sell, and license third parties to sell, competitive or identical goods and services (including under the Marks) within the Territory through Alternative Channels of Distribution.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan retains the right to sell, and license third parties to sell, competitive or identical goods and services within a franchisee's territory through Alternative Channels of Distribution. This means that even though a franchisee is granted a specific territory, Itan can still sell goods and services, including through online platforms, within that same territory.
This reservation of rights has significant implications for prospective franchisees. It means that Itan franchisees may face competition from the franchisor itself or from other entities authorized by the franchisor within their own territory. This could impact the franchisee's potential revenue and market share. The FDD does not specifically define "Alternative Channels of Distribution," so it is not explicitly stated whether internet sales are considered one of these alternative channels.
Prospective Itan franchisees should seek clarification from Itan regarding what constitutes "Alternative Channels of Distribution." Understanding the scope of these channels is crucial for assessing the potential competitive landscape and making informed decisions about the franchise investment. Franchisees should inquire about the types of goods and services that Itan might sell through these alternative channels and how this might affect their business operations.