Does Itan have a right of first refusal regarding the Transfer?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- **19.5.
Our Right of First Refusal.** If you or an Owner wish to engage in a Transfer, you or the Owner, as applicable, must obtain and send us a bona-fide offer executed by the purchaser after completion of due diligence.
We have 30 days after receiving the offer to decide whether to purchase the interest for the same price and upon the same terms contained in the offer, except we may substitute cash for any non-cash form of payment proposed in the offer.
If we notify you within the 30-day period that we intend to purchase the interest, you or the Owner, as applicable, must sell the interest to us.
We will have an additional 60 days to prepare for closing.
You or the Owner, as applicable, must provide us with all customary representations and warranties regarding the title to and condition of the assets or Equity Interest that we purchase, or at our option, the representations and warranties contained in the offer.
If we do not exercise our right of first refusal, you or the Owner, as applicable, may complete the Transfer to the purchaser pursuant to the terms of the offer, subject to the requirements of §19.2, including our approval of the transferee.
If the sale is not completed within 120 days after we receive the offer, or there is a material change to the terms of sale, we will again have the right of first refusal specified in this Section.
Our right of first refusal shall not apply to a Permitted Transfer.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan retains a right of first refusal if a franchisee or owner wishes to transfer their interest. To initiate a transfer, the franchisee or owner must first obtain a bona fide offer from a prospective purchaser after they have completed their due diligence. This offer must then be presented to Itan.
Itan has 30 days to decide whether to purchase the interest themselves, matching the price and terms of the offer. However, Itan can substitute cash for any non-cash payment forms proposed in the offer. If Itan decides to purchase the interest, the franchisee or owner is obligated to sell it to them. Itan is then granted an additional 60 days to prepare for the closing of the purchase. The franchisee or owner must provide customary representations and warranties regarding the title and condition of the assets or equity interest being purchased, or at Itan's option, the representations and warranties contained in the offer.
If Itan chooses not to exercise their right of first refusal, the franchisee or owner can proceed with the transfer to the original purchaser, provided they meet the standard transfer requirements, including Itan's approval of the transferee. However, if the sale is not completed within 120 days after Itan receives the offer, or if there are material changes to the terms of the sale, Itan's right of first refusal is reinstated. This right of first refusal does not apply to Permitted Transfers, which have separate notification and documentation requirements.