If an Itan franchisee signs the State Addendum, does it automatically apply to them?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Certain states have laws governing the franchise relationship and franchise documents. Certain states require modifications to the FDD, Franchise Agreement, Supplemental Agreements and other documents related to the sale of a franchise. This State-Specific Addendum ("State Addendum") will modify these agreements to comply with the applicable state's laws. The terms of this State Addendum will only apply if you meet the requirements of the applicable state independently of your signing of this State Addendum. The terms of this State Addendum (but only the State Addendum for the applicable State) will override any inconsistent provision of the FDD, Franchise Agreement or any Supplemental Documents. This State Addendum only applies to the following states: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
If your state requires these modifications, you will sign this State Addendum along with the Franchise Agreement and any Supplemental Agreements. If you sign this State Addendum, only the terms applicable to the state or states whose franchise laws apply to your transaction will govern. If you sign this State Addendum, but none of the state franchise laws listed above applies because their jurisdictional requirements have not been met, then this State Addendum will be void and inapplicable to you.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, signing the State Addendum does not automatically make it applicable to the franchisee. The State Addendum modifies the Franchise Agreement and other related documents to comply with specific state laws. However, the terms of the State Addendum only apply if the franchisee meets the legal requirements of the specific state, irrespective of signing the addendum. This means that merely signing the State Addendum does not guarantee its enforcement.
Itan's State Addendum is applicable only in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. If a franchisee signs the State Addendum but does not meet the jurisdictional requirements of any of these states, the addendum is considered void and does not apply. This ensures that the franchise agreement adheres to the relevant state laws based on where the franchisee operates, not just based on a signature.
For a prospective Itan franchisee, this means understanding the specific state laws that govern franchising in their area is crucial. Signing the State Addendum is a procedural step, but the actual applicability depends on meeting the state's legal requirements. It is important to consult with a legal professional to determine whether the state's franchise laws apply to their specific situation and to ensure full compliance. This also highlights the importance of understanding that the terms in the State Addendum will override any conflicting terms in the standard Franchise Agreement, but only if the state laws are applicable to the franchisee's operations.