If an Itan franchisee wants to purchase source-restricted items from a non-approved supplier, what three things must they send to Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If you wish to purchase or lease a source-restricted item from a non-approved supplier, you must send us: (a) a written request for approval; (b) product samples for testing purposes; and (c) all additional information we request. The supplier must agree to comply with our minimum insurance, indemnification and confidentiality requirements for system suppliers and allow us to periodically inspect their facility. We may also require that the supplier sign a license agreement with us if the products will bear our Marks. We will notify you of our decision within 30 days after we receive all required information and product samples. We may periodically reinspect approved products and suppliers and revoke our approval if a product or supplier fails to meet our then-current criteria. You must reimburse all costs we incur to evaluate products and suppliers you propose.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–21)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if a franchisee wishes to purchase or lease a source-restricted item from a supplier not already approved by Itan, they must take specific steps to seek approval. First, the franchisee must send Itan a written request for approval. Second, they must provide product samples for testing purposes so Itan can evaluate the item's quality and suitability. Third, the franchisee must furnish any additional information that Itan requests to aid in the decision-making process.
Furthermore, the supplier in question must agree to comply with Itan's minimum requirements for insurance, indemnification, and confidentiality, which are in place to protect the Itan system. The supplier must also allow Itan to periodically inspect their facility to ensure ongoing compliance with Itan's standards. Itan retains the right to require the supplier to sign a license agreement, particularly if the products will display Itan's trademarks or branding.
Itan will then notify the franchisee of its decision within 30 days after receiving all the necessary information and product samples. Even if a product and supplier are initially approved, Itan may periodically reinspect them and revoke approval if they no longer meet Itan's current criteria. The franchisee is responsible for reimbursing Itan for all costs incurred during the evaluation of the proposed products and suppliers. This process ensures that Itan maintains control over the quality and consistency of products used within its franchise system, even when franchisees seek alternative suppliers.