Does Itan reserve the right to sell competitive or identical goods and services within the Development Territory through Alternative Channels of Distribution?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
During the Term we will not develop or operate, or license a third party to develop or operate, a Salon that is physically located within the Development Territory other than: (a) any Salon that is operating, under development, or for which a franchise agreement has been executed, in each case as of the Effective Date, and that is (or will be) located within the Development Territory; and (b) any Salon otherwise permitted by this Section. At any time during the Term we reserve the right to engage in Acquisitions that involve, or subsequently result in, conversion of the acquired or acquiring company's outlets to ITAN® Salons, even if those outlets are located in the Development Territory. We reserve the right to sell, and license third parties to sell, competitive or identical goods and services (including under the Marks) within the Development Territory through Alternative Channels of Distribution.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan retains the right to sell, and license third parties to sell, competitive or identical goods and services within a franchisee's development territory through alternative channels of distribution. This means that even though a franchisee is granted a development territory, Itan is not restricted from selling similar products or services through other methods within that same territory.
This reservation of rights has significant implications for prospective Itan franchisees. It means that Itan could potentially establish alternative distribution channels, such as online sales, partnerships with retailers, or other non-traditional outlets, that compete directly with the franchisee's salon within their designated territory. This could impact the franchisee's revenue and market share.
While Itan grants territorial protections by agreeing not to develop or operate, or license a third party to develop or operate, a Salon that is physically located within the Development Territory, this protection is limited. The exception for alternative channels of distribution allows Itan to compete within the franchisee's territory through other means. A prospective franchisee should carefully consider the potential impact of these alternative channels on their business and discuss this issue with Itan before signing the Franchise Agreement.