If Itan instructs the franchisee to assign the current agreement to the transferee, what aspects of the franchise agreement remain the same?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
e) the transferee and its owners obtain all licenses and permits required by applicable Law to own and operate the Salon;
- (f) the transferee: (i) agrees to discharge and guarantee your obligations under this Agreement and any other Business contracts (including customer contracts/obligations and supplier contracts); and (ii) signs any agreement we require to confirm the foregoing;
- (g) the transferee and its owners sign our then-current form of franchise agreement (unless we instruct you to assign this Agreement to the transferee) except that: (i) the Term and renewal term(s) shall be the Term and renewal term(s) remaining under this Agreement unless we
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if Itan instructs a franchisee to assign the current agreement to a transferee, the term and renewal terms of the franchise agreement will remain the same, unless Itan specifies otherwise. Additionally, the transferee will not be required to pay a separate initial franchise fee.
This means that the new franchisee taking over the Itan salon will operate under the same time constraints as the original franchisee. For example, if the original agreement had 5 years remaining on its initial term and one 10-year renewal option, the transferee would inherit those same conditions. This can be beneficial as it provides clarity on the length of the franchise agreement.
However, the transferee must still meet other obligations, such as remodeling the salon to meet Itan's current standards within a specified timeframe, typically 12 months. This ensures that all Itan locations maintain a consistent brand image and quality. The transferee also needs to pay a $10,000 transfer fee to cover Itan's expenses related to the transfer, and may need to reimburse Itan for any broker commissions if a broker was involved in finding the transferee.