What kind of title must I transfer to Itan at closing for the Acquired Assets?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
At closing you must transfer good and clean title to the Acquired Assets, subject to any exceptions set forth in the Asset Purchase Agreement, and we must pay you the purchase price.
We may deduct from the purchase price: (i) any amounts you owe us or our affiliates under any Definitive Agreements including, if applicable, liquidated damages and other damages owed (other than lost profits) as a result of our termination of this Agreement due to your breach; and (ii) the amount of any liabilities we assume on your behalf, including future rent and pre-paid liabilities (e.g., gift cards or "package" purchases).
We will have at least 60 days after the purchase price of the Acquired Assets has been established to close the transaction.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, when you sell your Acquired Assets back to Itan, you must transfer "good and clean title" to those assets at closing. This transfer is subject to any exceptions outlined in the Asset Purchase Agreement, which both parties will execute to formalize the acquisition. The Asset Purchase Agreement will include standard statements and guarantees about the ownership and state of the Acquired Assets.
Itan has the right to deduct certain amounts from the purchase price. These deductions may include any outstanding debts you owe to Itan or its affiliates under any existing agreements. This could include liquidated damages or other damages resulting from your breach of the agreement, excluding lost profits. Additionally, Itan may deduct the amount of any liabilities they assume on your behalf, such as future rent or prepaid liabilities like gift cards or package purchases.
After the purchase price for the Acquired Assets is determined, Itan has a period of at least 60 days to finalize the transaction and close the deal. This timeframe allows Itan to prepare the necessary documentation and secure any required financing. This clause protects Itan, ensuring they have sufficient time to organize the financial and logistical aspects of acquiring your assets.
In the event of a disagreement regarding the Acquired Assets' purchase price, a formal appraisal process will be initiated to determine the fair market value. This appraisal will not include any value for goodwill or the franchise rights granted by the agreement. This valuation method ensures a fair and objective assessment of the assets' worth, focusing solely on their tangible value rather than the intangible benefits associated with the Itan franchise.