Does Itan have to offer a renewal of the franchise agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| THE FRANCHISE RELATIONSHIP | ||
|---|---|---|
| PROVISION S | ||
| a. Length of | FA: 1 (definition of Term) | Term is equal to 10 years. |
| franchise term | & 4.1 | |
| ADA: 1 (definition of | Term expires on the opening date listed in the development schedule for | |
| Term) | the last Salon you are required to develop. | |
| b. Renewal or extension of the term | FA: 4.1 & 4.2 | If you meet our conditions for renewal, you can enter into 2 consecutive successor franchise agreements. Each renewal term will be 5 years. The parties may mutually agree to further renewals but neither party is obligated to do so (subject to state law). |
| ADA: Not Applicable | No renewal rights. Parties must enter into a new area development agreement in order to grant you additional development rights. | |
| c. Requirements for you to renew or extend | FA: 4.1 & 4.2 | You must: not be in default; give us timely notice; sign then-current form of franchise agreement; sign general release (subject to state law); pay renewal fee; remodel Salon and upgrade furniture, fixtures and equipment to current standards; and extend lease term. If you renew, you may be required to sign a contract with materially different terms and conditions than the original contract. |
| ADA: Not Applicable | No renewal rights. Parties must enter into a new area development agreement in order to grant you additional development rights. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–39)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, whether or not Itan must offer a renewal of the franchise agreement depends on the type of agreement. For a standard Franchise Agreement (FA), if the franchisee meets Itan's conditions for renewal, they can enter into two consecutive successor franchise agreements, each with a term of 5 years. The parties can mutually agree to further renewals, but neither party is obligated to do so, subject to state law. However, for an Area Development Agreement (ADA), there are no renewal rights, and the parties must enter into a new area development agreement to grant additional development rights.
To renew a Franchise Agreement with Itan, a franchisee must not be in default, must give timely notice, sign the then-current form of franchise agreement, sign a general release (subject to state law), pay a renewal fee, remodel the salon, upgrade furniture, fixtures, and equipment to current standards, and extend the lease term. It is important to note that if a franchisee renews, they may be required to sign a contract with materially different terms and conditions than the original contract.
For prospective Itan franchisees, this means that renewal is not guaranteed and depends on fulfilling specific obligations and Itan's discretion, especially considering the possibility of materially different terms in a renewal agreement. Those considering an Area Development Agreement should be aware that they will need to negotiate a new agreement for further development rights instead of having a renewal option.