Is Itan obligated to offer further renewals after the second renewal term?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
4. TERM AND RENEWAL.
- 4.1. Generally. This Agreement grants you the right to operate your Salon during the Term. You may renew your franchise rights by signing a Successor Agreement for a five (5) year renewal term. You may enter into a maximum of two (2) Successor Agreements. The parties may agree to further renewals after expiration of the second (2nd) renewal term, but neither party is obligated to do so (unless required by applicable Law, in which case the same renewal terms and conditions set forth in this Agreement shall apply to subsequent renewals). In order to sign a Successor Agreement you must satisfy all renewal conditions specified in this Agreement or the Successor Agreement you wish to renew, as applicable. The Successor Agreement shall be the current form of franchise agreement we use to grant franchises as of the expiration of the Term or renewal term, as applicable, the terms of which may vary materially and substantially from the terms of this Agreement. Upon renewal, we reserve the right to modify the boundaries of your Territory in accordance with our then-current territory guidelines and criteria. If this Agreement is a Successor Agreement, the Term of this Agreement and your remaining renewal rights, if any, shall be governed by your original franchise agreement
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the standard franchise agreement grants the franchisee the right to operate their salon for an initial term, with the option to renew the franchise rights by signing a Successor Agreement. However, Itan specifies that a franchisee can only enter into a maximum of two Successor Agreements, each for a five-year renewal term.
After the expiration of the second renewal term, Itan and the franchisee may mutually agree to further renewals, but neither party is obligated to do so. An exception exists if applicable law requires Itan to offer further renewals, in which case the same renewal terms and conditions from the original agreement would apply to any subsequent renewals.
This means that while Itan franchisees have the opportunity to extend their franchise agreement twice, there is no guarantee of renewals beyond that point unless mandated by law. Prospective franchisees should be aware that the terms of any Successor Agreement may differ significantly from the original agreement, and Itan reserves the right to modify the territory boundaries upon renewal.