factual

What obligations do I have at closing if Itan purchases my salon?

Itan Franchise · 2025 FDD

Answer from 2025 FDD Document

Subsections (f), (g), (h) and (i) above do not apply if you Transfer your Salon to an approved transferee or we exercise our right to purchase your Salon. If an Owner transfers his or her entire Equity Interest in the Business or Franchisee Entity but you continue to operate the Salon pursuant to this Agreement, then this Section will not apply to you (or to any remaining Owner) and the former Owner is subject only to the obligations set forth in subsections (a) and (b).

21.2. Purchase Option.

  • (a) Generally.

Upon termination or expiration of this Agreement we have the option to purchase your Salon and/or its assets.

If we choose to exercise our purchase option, we will notify you of the assets we wish to purchase (the "Acquired Assets") within 20 days after the termination or expiration date.

Source: Item 23 — RECEIPT (FDD pages 44–190)

What This Means (2025 FDD)

According to Itan's 2025 Franchise Disclosure Document, if Itan exercises its option to purchase your salon, certain obligations that normally apply upon termination or expiration of the franchise agreement do not apply to you. Specifically, you are not required to comply with instructions to return, destroy, or transfer copies of the Manual and Copyrighted Materials, or to remove signs, brochures, advertising, promotional materials, forms, or other materials bearing Itan's marks or containing confidential information. Additionally, you do not have to alter the interior and exterior of the premises to prevent any further resemblance to or connection with an Itan salon, including repainting or removing trade dress, fixtures, signage, window decals, and décor items. You also do not need to notify telephone, listing, and domain name registration companies of the termination of your right to use telephone numbers, domain names, or directory listings associated with the salon.

However, these exceptions only apply if Itan exercises its right to purchase the salon. If you transfer your salon to an approved transferee, these obligations would still not apply. If you continue to operate the salon after an owner transfers their equity interest, these obligations also do not apply to you or any remaining owner, with the former owner only subject to obligations related to financial matters.

It is important to note that the FDD specifies that upon termination or expiration of the Franchise Agreement, Itan has the option to purchase your salon and/or its assets. If Itan chooses to exercise this option, they will notify you of the assets they wish to purchase within 20 days after the termination or expiration date. This purchase option provides Itan with a way to maintain control over the location and potentially continue operations under the Itan brand, while also relieving the franchisee of certain responsibilities related to de-identifying the location as an Itan salon.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.