How are options to renew a lease included in the lease term for Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If you lease the Premises, you must negotiate with your landlord, if necessary, to modify your lease in order to provide you with a term of at least 10 years from the Conversion Date.
You must also cause your landlord to execute our required Lease Addendum.
We may require that you complete these steps prior to execution of the Franchise Agreement and this Addendum.
At a minimum, we may require execution of the Lease Addendum as a condition to us issuing our Certificate of Conversion Completion pursuant to §5 of this Addendum.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if a franchisee leases their premises, they must negotiate with their landlord to secure a lease term of at least 10 years from the conversion date. The franchisee is also required to have their landlord execute Itan's required Lease Addendum. Itan may require these steps to be completed before the Franchise Agreement is executed, and at a minimum, may require the Lease Addendum to be executed as a condition of issuing the Certificate of Conversion Completion.
This requirement ensures that Itan franchisees have a stable location for their business for at least the initial term of the franchise agreement, which is defined as 10 years from the effective date. This is a fairly standard practice in franchising, as it protects both the franchisee and the franchisor by ensuring business continuity.
However, the FDD does not specify how lease renewal options are treated within this 10-year minimum term. It is unclear whether the initial lease term must be 10 years, or if a shorter initial term with renewal options extending to 10 years would be acceptable.
A prospective Itan franchisee should clarify with Itan whether a lease with renewal options extending to at least 10 years from the Conversion Date would satisfy the lease requirements, or if the initial lease term must be a full 10 years. This clarification is crucial for negotiating favorable lease terms and ensuring compliance with Itan's requirements.