What insurance-related obligations must be fulfilled before Itan issues a Certificate of Conversion Completion?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5. Certificate of Conversion Completion. We will not issue a Certificate of Conversion Completion until all of the following requirements have been satisfied:
- (a) your Premises meets all of our required standards and specifications;
- (b) we review and approve the construction, build-out and layout of your facility;
- (c) you purchase and install all required equipment, furniture, fixtures, decorations and signage;
- (d) you obtain all required insurance and provide us with proof of coverage (you must ensure we are a named insured on your insurance policies as required by the Franchise Agreement);
- (e) you obtain all required licenses, permits and approvals from Governmental Authorities;
- (f) your Managing Owner and general managers successfully complete our initial training program;
- (g) you pay all amounts owed to us, our affiliates and suppliers that are due as of the opening date; and
- (h) you comply with all of your other obligations under this Addendum.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, before Itan issues a Certificate of Conversion Completion, a franchisee must obtain all required insurance and provide Itan with proof of coverage. The franchisee must also ensure that Itan is named as an additional insured on the insurance policies, as required by the Franchise Agreement. This is a standard practice in franchising, as it protects the franchisor from potential liabilities related to the franchisee's operations.
This requirement ensures that the Itan franchisee has adequate insurance coverage in place before commencing operations. By requiring proof of coverage and naming Itan as an additional insured, Itan mitigates its risk exposure and ensures that it is protected in the event of any claims or lawsuits arising from the franchisee's business activities. The specific types and amounts of insurance required are detailed in the Manual, which franchisees should review carefully.
It is important for prospective Itan franchisees to understand these insurance requirements and factor the costs of obtaining the necessary coverage into their initial investment. Failing to meet these insurance obligations can delay the issuance of the Certificate of Conversion Completion and prevent the franchisee from opening their Itan salon. Franchisees should consult with an insurance professional to ensure they obtain the appropriate policies that meet Itan's requirements.