Does Itan require a renewal provision in its franchise agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
4. TERM AND RENEWAL.
4.1. Generally. This Agreement grants you the right to operate your Salon during the Term. You may renew your franchise rights by signing a Successor Agreement for a five (5) year renewal term. You may enter into a maximum of two (2) Successor Agreements. The parties may agree to further renewals after expiration of the second (2nd) renewal term, but neither party is obligated to do so (unless required by applicable Law, in which case the same renewal terms and conditions set forth in this Agreement shall apply to subsequent renewals). In order to sign a Successor Agreement you must satisfy all renewal conditions specified in this Agreement or the Successor Agreement you wish to renew, as applicable. The Successor Agreement shall be the current form of franchise agreement we use to grant franchises as of the expiration of the Term or renewal term, as applicable, the terms of which may vary materially and substantially from the terms of this Agreement. Upon renewal, we reserve the right to modify the boundaries of your Territory in accordance with our then-current territory guidelines and criteria. If this Agreement is a Successor Agreement, the Term of this Agreement and your remaining renewal rights, if any, shall be governed by your original franchise agreement
4.2. Renewal Requirements. In order to renew, you and the Owners (as applicable) must:
- (a) send us a notice of your intent to enter into a Successor Agreement not less than 240 days nor more than one (1) year before the expiration of the Term or renewal term, as applicable;
- (b) not be in default under any Definitive Agreement at the time you send the renewal notice or sign the Successor Agreement;
- (c) sign the Successor Agreement and all ancillary documents we require franchisees to sign;
- (d) sign a General Release;
- (e) pay us a $1,000 renewal fee;
- (f) remodel the Salon and upgrade all furniture, fixtures and equipment to conform to our thencurrent standards and specifications; and
- (g) extend the term of your lease for the duration of the renewal term.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the franchise agreement grants the franchisee the right to operate their salon for a term, and franchisees have the option to renew their franchise rights by signing a Successor Agreement for a five-year renewal term. A franchisee can enter into a maximum of two Successor Agreements, and further renewals can be agreed upon by both parties after the second renewal term expires, although neither party is obligated to do so unless required by law. If required by law, the same renewal terms and conditions apply to subsequent renewals. The Successor Agreement will be the current form of the franchise agreement used by Itan at the time of renewal, which may differ significantly from the original agreement. Upon renewal, Itan reserves the right to modify the territory boundaries according to their current guidelines. If the agreement is a Successor Agreement, the term and remaining renewal rights are governed by the original franchise agreement. The initial term for Itan franchises is 10 years.
To renew the Itan franchise, the franchisee must meet specific requirements. They must send a notice of intent to enter into a Successor Agreement between 240 days and one year before the expiration of the current term. The franchisee must not be in default under any agreement at the time of renewal notice or when signing the Successor Agreement. They are also required to sign the Successor Agreement and any related documents, as well as a General Release. A renewal fee of $1,000 must be paid to Itan. The franchisee is responsible for remodeling the salon and upgrading all furniture, fixtures, and equipment to meet Itan's current standards. Finally, the franchisee must extend the term of their lease to cover the duration of the renewal term.
It is important for prospective Itan franchisees to understand these renewal terms, as they involve significant financial obligations such as remodeling costs and a renewal fee. The terms of the Successor Agreement can also vary substantially from the original agreement, which could impact the franchisee's operational and financial obligations. Franchisees should also be aware that Itan can modify the territory boundaries upon renewal, potentially affecting the salon's market area. Understanding these conditions is crucial for making an informed decision about investing in an Itan franchise and planning for the future of the business.