Who are the 'Owners' referred to in the Itan franchise agreement, and what are their obligations after termination, expiration, or transfer?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
This Franchise Owner Agreement (this "Agreement") is entered into by: (a) each of the undersigned Owners of Franchisee (defined below); and (b) the spouse of each such Owner who is a natural Person, in favor of iTAN Franchising, Inc., a California corporation, and its successors and assigns ("us"). Each signatory to this Agreement is referred to as "you".
You agree that: (a) your direct and immediate liability under this guaranty is joint and several with Franchisee and all other signatories to this Agreement; (b) you will render any payment required under the Secured Agreements upon demand if Franchisee fails to promptly do so; (c) your liability is not contingent or conditioned upon our pursuit of any remedies against Franchisee or any other Person; and (d) your liability will not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence we grant to Franchisee or any other Person, including the acceptance of any partial payment or performance, or the compromise or release of any Claims, none of which shall in any way modify or amend this guarantee, which remains continuing and irrevocable during the term of each Secured Agreement and following the termination, expiration or transfer of each Secured Agreement to the extent any financial obligations under a Secured Agreement survive such termination, expiration or transfer.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the term 'Owners' refers to the undersigned owners of the franchisee, as well as their spouses if they are natural persons. These individuals are parties to the Franchise Owner Agreement, which is made in favor of iTAN Franchising, Inc. The agreement specifies that each signatory is referred to as 'you.'
Regarding obligations after termination, expiration, or transfer, the Franchise Owner Agreement includes a guaranty. This guaranty stipulates that the direct and immediate liability of the owners is joint and several with the franchisee and all other signatories. Owners are required to render any payment demanded if the franchisee fails to do so promptly. This liability is not contingent upon Itan pursuing remedies against the franchisee or any other person.
Furthermore, the owner's liability will not be diminished or affected by any extensions of time, credit, or other allowances granted to the franchisee. This includes acceptance of partial payments or compromise of claims. The guaranty remains continuing and irrevocable during the term of each secured agreement and following the termination, expiration, or transfer of each secured agreement, especially to the extent that any financial obligations survive such termination, expiration, or transfer. This ensures that the financial responsibilities of the franchise are upheld even if the franchise changes hands or ceases operation.