What specific franchise laws does the Itan State Addendum aim to comply with?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
MENTAL AGREEMENTS AND FRANCHISE DISCLOSURE DOCUMENT FOR CERTAIN STATES**
BACKGROUND AND PURPOSE
The following modifications are made to the iTAN Franchise Disclosure Document ("FDD" or "Disclosure Document") issued by iTAN Franchising, Inc. ("we" or "us" or "franchisor") to franchisee ("you" or "franchisee") and may supersede certain portions of the Franchise Agreement between you and us dated _________________________, 202__ (the "Franchise Agreement"). When the term "Supplemental Agreements" is used, it means any area development agreement, area representative agreement, master franchise agreement, or similar agreement entered into between us and you, if applicable.
Certain states have laws governing the franchise relationship and franchise documents. Certain states require modifications to the FDD, Franchise Agreement, Supplemental Agreements and other documents related to the sale of a franchise. This State-Specific Addendum ("State Addendum") will modify these agreements to comply with the applicable state's laws. The terms of this State Addendum will only apply if you meet the requirements of the applicable state independently of your signing of this State Addendum. The terms of this State Addendum (but only the State Addendum for the applicable State) will override any inconsistent provision of the FDD, Franchise Agreement or any Supplemental Documents. This State Addendum only applies to the following states: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
If your state requires these modifications, you will sign this State Addendum along with the Franchise Agreement and any Supplemental Agreements. If you sign this State Addendum, only the terms applicable to the state or states whose franchise laws apply to your transaction will govern. If you sign this State Addendum, but none of the state franchise laws listed above applies because their jurisdictional requirements have not been met, then this State Addendum will be void and inapplicable to you.
CALIFORNIA
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- The California Franchise Investment Law requires a copy of all proposed agreements relating to the sale of the Franchise be delivered together with the Disclosure Document.
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- Section 31125 of the California Corporations Code requires us to give you a disclosure document, in a form containing the information that the Commissioner may by rule or order require, before a solicitation of a proposed material modification of an existing franchise.
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- Neither the franchisor nor any person or franchise broker in Item 2 of the FDD is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association or exchange.
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- The earnings claims figures do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your franchise business. Franchisees or former franchisees listed in the Disclosure Document may be one source of this information.
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- Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a Franchise Agreement or Supplemental Agreement restricting venue to a forum outside the State of California.
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- The Franchise Agreement and Supplemental Agreements require application of the laws of California. This provision may not be enforceable under California law.
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- The Franchise Agreement and Supplemental Agreements may provide for termination upon bankruptcy. Any such provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.).
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- The Franchise Agreement and Supplemental Agreements may contain a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law.
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- Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable. Any such provisions contained in the Franchise Agreement or Supplemental Agreements may not be enforceable.
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- California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination, transfer, or non-renewal of a franchise. If the Franchise Agreement or Supplemental Agreements contain a provision that is inconsistent with the California Franchise Investment Law, the California Franchise Investment Law will control.
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- You must sign a general release of claims if you renew or transfer your Franchise. California Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Sections 31000 through 31516). Business and Professions Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 through 20043).
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- OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION & INNOVATION. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION & INNOVATION AT https://dfpi.ca.gov/.
HAWAII
- The following is added to the Cover Page:
**THIS FRANCHISE WILL BE/HAS BEEN FILED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF HAWAII.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the State Addendum is designed to modify franchise agreements to comply with specific state laws. This addendum applies to franchisees in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
For franchisees in California, the addendum addresses the California Franchise Investment Law, requiring that all proposed agreements related to the franchise sale be delivered with the disclosure document. It also references Section 31125 of the California Corporations Code, which mandates that Itan provide a disclosure document before soliciting any material modification to an existing franchise. Additionally, it confirms that neither Itan nor any franchise broker is subject to orders from national securities associations or exchanges.
For franchisees in Illinois, the addendum acknowledges the Illinois Franchise Disclosure Act, specifying that Illinois law governs the franchise agreement and supplemental agreements. It also states that any provision designating jurisdiction and venue outside of Illinois is void, although arbitration outside of Illinois is permitted. The addendum also references sections 19 and 20 of the Illinois Franchise Disclosure Act regarding termination and non-renewal rights, and section 41, which voids any attempt to waive compliance with the Illinois Franchise Disclosure Act or other Illinois laws.
For franchisees in Indiana, the addendum recognizes the Indiana Franchise Disclosure Law, IC 23-2-2-2.5, stating that Indiana law supersedes any conflicting provisions in the franchise documents. It also amends the agreements to be construed in accordance with Indiana law and deletes any provisions that designate jurisdiction or venue outside of Indiana. The addendum further addresses the prohibition against unilateral termination without good cause, as defined in Indiana Code § 23-2-2.7-1(7), and modifies the covenant not to compete to comply with Indiana Code 23-2-2.7-1(9). Finally, it prohibits liquidated damages and termination penalties, amending the franchise documents accordingly.