What is the 'Interim Term' in the context of an Itan franchise agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If you do not sign a Successor Agreement but continue to operate your Salon after the Term expires, we may either treat this Agreement as: (a) expired as of the Term expiration date with you operating in violation of our rights; or (b) continued on a month-to-month basis (the "Interim Term") until either party provides the other party with 30 days' prior notice of termination of the Interim Term. All your obligations remain in full force and effect during the Interim Term, if
applicable, as if this Agreement had not expired, and all obligations imposed on you upon expiration of the Term will take effect upon termination of the Interim Term.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the 'Interim Term' comes into play if a franchisee continues to operate their salon after the initial franchise term expires but does not sign a Successor Agreement (renewal agreement). In this situation, Itan has the option to treat the agreement as either expired, meaning the franchisee is operating in violation of Itan's rights, or to allow the franchise to continue on a month-to-month basis.
If Itan chooses the latter option, this month-to-month continuation is referred to as the "Interim Term". During this Interim Term, all of the franchisee's obligations under the original franchise agreement remain in full force and effect, as if the agreement had not expired. This means the franchisee must continue to adhere to Itan's operating standards, pay royalties and other fees, and comply with all other requirements of the franchise agreement.
The Interim Term continues until either Itan or the franchisee provides the other party with 30 days' prior written notice of termination. Upon termination of the Interim Term, all obligations imposed on the franchisee upon the expiration of the original term will take effect. This could include things like ceasing to use Itan's trademarks and trade secrets, and complying with post-termination non-compete provisions.