What is the purpose of the modifications made to the iTAN Franchise Disclosure Document by the State Addendum?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Certain states have laws governing the franchise relationship and franchise documents. Certain states require modifications to the FDD, Franchise Agreement, Supplemental Agreements and other documents related to the sale of a franchise. This State-Specific Addendum ("State Addendum") will modify these agreements to comply with the applicable state's laws. The terms of this State Addendum will only apply if you meet the requirements of the applicable state independently of your signing of this State Addendum. The terms of this State Addendum (but only the State Addendum for the applicable State) will override any inconsistent provision of the FDD, Franchise Agreement or any Supplemental Documents. This State Addendum only applies to the following states: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
If your state requires these modifications, you will sign this State Addendum along with the Franchise Agreement and any Supplemental Agreements. If you sign this State Addendum, only the terms applicable to the state or states whose franchise laws apply to your transaction will govern. If you sign this State Addendum, but none of the state franchise laws listed above applies because their jurisdictional requirements have not been met, then this State Addendum will be void and inapplicable to you.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to iTAN's 2025 Franchise Disclosure Document, the State Addendum modifies the Franchise Disclosure Document, Franchise Agreement, and Supplemental Agreements to comply with specific state laws governing franchises. This addendum is crucial because franchise laws vary significantly from state to state, and iTAN must ensure that its franchise operations adhere to these diverse regulations. The State Addendum applies only to franchisees meeting the requirements of the specific state, irrespective of signing the addendum.
For a prospective iTAN franchisee, this means that the terms within the State Addendum will override any conflicting provisions in the standard FDD or Franchise Agreement, but only for the specific state laws that apply to their transaction. The FDD lists California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin as states to which the addendum may apply. If a franchisee signs the State Addendum but does not meet the jurisdictional requirements of any of the listed states, the addendum becomes void and does not apply to them.
For example, the Illinois State Addendum specifies that Illinois law governs the Franchise Agreement and that any provision designating jurisdiction and venue outside of Illinois is void, although arbitration outside of Illinois is permitted. Similarly, the Rhode Island addendum ensures that iTAN will not enforce waivers of liability imposed by the Rhode Island Franchise Law and provides a four-year statute of limitations for claims arising under that law. These modifications ensure that iTAN complies with state-specific legal requirements, protecting both the franchisor and the franchisee by aligning the franchise agreement with local laws.
Therefore, it is essential for potential iTAN franchisees to carefully review the State Addendum applicable to their state to understand their rights and obligations under local franchise laws. This ensures that the franchise agreement is enforceable and that both parties are protected within the legal framework of the franchisee's specific state.