What is the relationship between the Itan Franchise Agreement and Supplemental Agreements?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
When the term "Supplemental Agreements" is used, it means any area development agreement, area representative agreement, master franchise agreement, or similar agreement entered into between us and you, if applicable.
INDIANA
In recognition of the requirements of the Indiana Franchise Disclosure Law, IC 23-2-2-2.5, the Franchise Agreement and Supplemental Agreements are amended as follows:
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- The laws of the State of Indiana supersede any provisions of the Disclosure Document, Franchise Agreement and Supplemental Agreements if such provisions are in conflict with Indiana law.
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- The Franchise Agreement and Supplemental Agreements are amended to provide that such agreements will be construed in accordance with the laws of the State of Indiana.
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- Any provision in the Franchise Agreement which designates jurisdiction or venue, or requires the franchisee to agree to jurisdiction or venue, in a forum outside of Indiana, is deleted from any Franchise Agreement and Supplemental Agreement issued in the State of Indiana.
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Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a Franchise Agreement or Supplemental Agreement restricting venue to a forum outside the State of California.
The Franchise Agreement and Supplemental Agreements require application of the laws of California.
The Franchise Agreement and Supplemental Agreements may provide for termination upon bankruptcy.
The Franchise Agreement and Supplemental Agreements may contain a covenant not to compete which extends beyond the termination of the franchise.
Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
Any such provisions contained in the Franchise Agreement or Supplemental Agreements may not be enforceable.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the Supplemental Agreements are related to the Franchise Agreement and can modify or supersede it under certain conditions. Specifically, the term "Supplemental Agreements" refers to any area development agreement, area representative agreement, master franchise agreement, or similar agreement entered into between Itan and the franchisee. These agreements, if applicable, work in conjunction with the Franchise Agreement to define the full scope of the franchise relationship.
In some states like Indiana, the Franchise Agreement and Supplemental Agreements are amended to ensure compliance with state laws. For example, Indiana law supersedes any conflicting provisions in the Disclosure Document, Franchise Agreement, and Supplemental Agreements. Additionally, any clause designating jurisdiction or venue outside of Indiana is deleted for franchises issued in Indiana. These modifications highlight the importance of understanding how state-specific regulations can impact the franchise agreement.
Prospective franchisees should also be aware that certain provisions within the Franchise Agreement and Supplemental Agreements, such as those relating to non-competition covenants, termination upon bankruptcy, and liquidated damages, may not be enforceable under certain state or federal laws, such as those in California or under federal bankruptcy law. It is crucial for potential Itan franchisees to consult with legal counsel to understand the applicability and enforceability of these provisions in their specific jurisdiction.
In summary, the Supplemental Agreements serve to augment or modify the Franchise Agreement, and their interpretation and enforceability can vary based on state and federal laws. Franchisees need to carefully review all agreements and seek legal advice to fully understand their rights and obligations.