If an Itan franchisee terminates the agreement due to Itan's breach, what post-term obligations must the franchisee still comply with?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.1. Obligations of You and the Owners. After the termination, expiration or Transfer of this Agreement, you and the Owners agree to:
- (a) immediately cease use of the Intellectual Property;
- (b) comply with all post-term covenants described in §14 or a Franchise Owner Agreement;
- (c) cancel all fictitious or assumed name registrations relating to your use of the Marks;
- (d) pay us all amounts you owe including, if applicable, liquidated damages pursuant to §21.3;
- (e) comply with our data retention policies relating to Business Data;
- (f) transfer Customer Data (and, if we so request, assign all customer contracts) to us or our designee;
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, even if the franchisee terminates the agreement due to Itan's breach, certain post-term obligations still apply to both the franchisee and any involved owners. These obligations are designed to protect Itan's intellectual property, customer relationships, and financial interests after the franchise relationship ends.
Specifically, the franchisee and owners must immediately cease using Itan's intellectual property, adhere to any post-term covenants outlined in Section 14 or a Franchise Owner Agreement, and cancel any assumed name registrations related to the use of Itan's marks. This prevents the former franchisee from continuing to operate under the Itan brand or confusing customers.
Furthermore, the franchisee must pay all outstanding amounts owed to Itan, comply with data retention policies regarding business data, and transfer customer data (and potentially assign customer contracts) to Itan or its designee. These measures ensure a smooth transition of customer relationships and protect Itan's ongoing business operations. It is important to note that these obligations are in place regardless of the reason for termination, including termination due to Itan's breach, as outlined in Section 21.1 of the franchise agreement.