Does Itan require franchisees to hire an attorney to review the membership agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
4. MISCELLANEOUS.
- (a) If either party hires an attorney or files suit against the other party for breach of this Agreement, the losing party must reimburse the prevailing party for its reasonable attorneys' fees and costs.
- (b) This Agreement is governed by the laws of the state in which you reside and the courts in that state have exclusive jurisdiction over any legal proceedings arising out of this Agreement.
- (c) Any claim or defense you may have against us or against Franchisee, regardless of cause or origin, cannot be used as a defense against our enforcement of this Agreement.
- (d) Each section of this Agreement (and portion thereof) is severable. If any section (or portion thereof) is unenforceable, it shall not affect the enforceability of any other section (or portion thereof). A court may revise any provision of this Agreement to the extent necessary to make the provision enforceable.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
Based on the 2025 FDD, Itan does not explicitly require franchisees to hire an attorney to review the franchise agreement. However, the FDD does state that if either Itan or the franchisee hires an attorney or files suit against the other party for breach of the agreement, the losing party must reimburse the prevailing party for its reasonable attorneys' fees and costs. This suggests that while not mandatory, seeking legal counsel is an option available to both parties.
While Itan doesn't mandate legal review, it's generally advisable for prospective franchisees to consult with an attorney before signing any franchise agreement. An attorney can help the franchisee understand the terms and conditions of the agreement, assess the risks and benefits of the franchise opportunity, and negotiate more favorable terms if possible. This is a common practice in franchising, as the franchise agreement is a legally binding document with significant financial and operational implications.
Given the complexity and long-term nature of franchise agreements, franchisees should consider the potential costs of not seeking legal advice upfront, which could include missing unfavorable terms or conditions. While the FDD does not require it, engaging an attorney could provide valuable protection and peace of mind for the franchisee.