What is Itan's process for resolving disputes before litigation?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ights to the Territory; (c) protecting the reputation and goodwill associated with our Marks; and (d) partially compensating us for financial damages we expect to incur as a result of your breach or wrongful termination. If this liquidated damages clause is unenforceable under applicable Law, then we are only entitled to recover actual damages we incur as a result of your default or improper termination.
22. DISPUTE RESOLUTION.
22.1. Negotiation and Mediation. Except as otherwise provided below with respect to Excluded Claims, the parties shall attempt in good faith to resolve any Dispute through informal discussions and negotiations. If these efforts are unsuccessful, either party may submit the Dispute to mediation before a mutually-agreeable mediator prior to litigation. All negotiations and mediation proceedings (including all discovery conducted therein and statements and settlement offers made by either party or the mediator in connection with the mediation): (a) shall be strictly confidential; (b) shall constitute "settlement negotiations" for purposes of federal and state rules of evidence; and (c) shall not be admissible or otherwise used for any purpose in any court or arbitration proceeding (except evidence that would otherwise be discoverable or admissible shall not be excluded from discovery or made inadmissible simply because of its use in mediation). The mediator may not be called as a witness for any purpose in any court proceeding. Any Dispute involving Claims alleging a breach of §14, §17 and/or §21 (referred to as "Excluded Claims") is not subject to mandatory negotiation or mediation unless both parties agree otherwise.
22.2. Litigation. If a Dispute either (a) is not successfully resolved by mediation within 60 days after a party makes a demand for mediation or (b) involves an Excluded Claim, then either party may file a lawsuit in any state or federal court of general jurisdiction in accordance with the choice of venue provision below. The parties hereby express their clear and unequivocal intent that a court, rather
than a mediator, has exclusive jurisdiction to decide the threshold issue of whether a Dispute involves an Excluded Claim (i.e., whether any Claim alleges a breach of §14, §17 or §21).
22.3. Venue. All mediation and litigation shall take place in the county in which we maintain our principal place of business at the time the Dispute arises (currently, San Diego County, California).
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company outlines a specific process for dispute resolution. Except for claims involving a breach of sections 14, 17, and/or 21 of the agreement (referred to as "Excluded Claims"), both Itan and the franchisee must first attempt to resolve any dispute through informal discussions and negotiations. If these informal efforts are unsuccessful, either party has the option to submit the dispute to mediation using a mutually agreed-upon mediator before pursuing litigation. However, disputes involving Excluded Claims are not subject to mandatory negotiation or mediation unless both parties agree to it.
Itan stipulates that all negotiations and mediation proceedings are to be kept strictly confidential. This includes any discovery conducted, statements made, and settlement offers exchanged by either party or the mediator. All such communications are considered "settlement negotiations" and are inadmissible in court or arbitration proceedings, except for evidence that would otherwise be discoverable. The mediator is also prohibited from being called as a witness in any court proceeding. If mediation does not resolve the dispute within 60 days after a party demands mediation, or if the dispute involves an Excluded Claim, either party can file a lawsuit in a state or federal court.
All mediation and litigation must occur in the county where Itan maintains its principal place of business, which is currently San Diego County, California. Both parties consent to the jurisdiction of these courts and waive any objections to this venue. It is important to note that any claim (other than for payment of monies owed or an Excluded Claim) must be brought by filing a written demand for mediation within one year of the event giving rise to the claim, or the right to any remedy will be waived.