If an Itan franchisee signs the State Addendum, what determines which state's terms will govern?
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, the State Addendum modifies the franchise agreement to comply with specific state laws. This addendum is applicable in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. If a franchisee's state requires these modifications, they will sign the State Addendum along with the Franchise Agreement.
The terms of the State Addendum will only govern if the franchise laws of the state apply to the transaction. This means that the franchisee must meet the jurisdictional requirements of that particular state independently of signing the addendum. If the franchisee signs the State Addendum but does not meet the jurisdictional requirements of any of the listed states, the State Addendum becomes void and inapplicable.
In essence, signing the State Addendum does not automatically subject the franchise agreement to a specific state's laws. The applicability of a state's terms depends on whether the franchisee meets the legal requirements of that state, regardless of the signature on the addendum. This ensures that the franchise operates in compliance with the relevant state laws, providing legal clarity and protection for both Itan and the franchisee.