Does Itan have a right of first refusal to purchase the assets of a franchise?

According to Itan's 2025 Franchise Disclosure Document, Itan does have a right of first refusal to purchase the assets of a franchise. Specifically, Itan has the right to purchase the assets on the same terms and conditions as a bona fide third party who is willing and able to purchase those assets. Additionally, Itan has the right to acquire the assets of a franchise for the market or appraised value if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach.

This right of first refusal means that if a franchisee wants to sell their Itan business, they must first offer Itan the opportunity to buy it on the same terms offered by a third-party buyer. This gives Itan control over who enters the system and ensures that the brand maintains consistent standards.

For a prospective franchisee, this could mean that selling the business might take longer, as Itan needs to be given time to evaluate the offer and decide whether to exercise its right of first refusal. However, it also provides a degree of security, knowing that Itan has an interest in maintaining the value of the franchise and may be a potential buyer if the franchisee decides to sell. It is also important to note that Itan can refuse a transfer of ownership for good cause, such as the proposed transferee failing to meet Itan's qualifications or standards, being a competitor, or being unwilling to comply with lawful obligations.

Furthermore, Itan's right to acquire the assets if the franchisee breaches the agreement and fails to cure it provides Itan with a mechanism to take over a poorly managed or non-compliant franchise, protecting the brand's reputation and ensuring adherence to the franchise agreement. This clause underscores the importance of adhering to the franchise agreement to avoid the risk of Itan acquiring the assets at market or appraised value due to a breach.