What is Itan's role when a franchisee wants to transfer the Franchise Agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT "H"-2*
GENERAL RELEASE
[See Attached]
WAIVER AND RELEASE OF CLAIMS
| This Waiver and Release of Claims (this "Agreement") is made as of, 202 (the "Effective | ||
|---|---|---|
| Date") by, a(n) ("you") and each individual holding a | ||
| direct or indirect ownership interest in you (collectively "Owner") in favor of iTAN Franchising, Inc., a | ||
| California corporation ("us," and together with you and Owner, the "Parties"). |
Background
- A. We signed a Franchise Agreement with you, dated _______, 202____ (the "Franchise Agreement") pursuant to which we granted you the right to own and operate an iTAN® salon.
- B. You have notified us of your desire to transfer the Franchise Agreement and all rights related thereto, or an ownership interest in the franchisee entity, to a transferee, [enter into a successor franchise agreement] and we have consented to such transfer [agreed to enter into a successor franchise agreement].
- C. As a condition to our consent to the transfer [your ability to enter into a successor franchise agreement], you and Owner have agreed to execute this Agreement upon the terms and conditions stated below.
- D. In consideration of our consent to the transfer [our entering into a successor franchise agreement], and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and intending to be legally bound, you and Owner hereby agree as set forth below.
Agreement
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- Release.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer their Franchise Agreement, they must first notify Itan of their desire to transfer the agreement and all rights related to it, or an ownership interest in the franchisee entity, to a transferee. Itan must consent to this transfer. As a condition of Itan's consent, the franchisee and owner must agree to execute an agreement based on the terms and conditions outlined by Itan. In return for Itan's consent to the transfer, the franchisee and owner must agree to the terms set forth by Itan.
Itan's consent to a transfer does not waive any claims Itan has against the transferring franchisee or Itan's right to demand that the transferee comply with all terms of the franchise agreement. The franchisee must obtain a bona-fide offer executed by the purchaser after completion of due diligence and send it to Itan if they or an owner wishes to engage in a transfer.
Furthermore, the franchisee and their owners must sign a general release, and agree to subordinate the transferee's financial obligations to the franchisee's financial obligations owed to Itan pursuant to the franchise agreement. Itan may require a written subordination agreement. Itan also has the option to exercise their right of first refusal. The franchisee or transferring owner, and the transferee, must satisfy all other conditions Itan reasonably requires as a condition to approving the transfer.