What are the standard leasing terms Itan might impose if I or my affiliate own the real estate?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If we exercise our purchase option we may require that: (i) you assign your lease to us at no additional charge (if you lease the premises); or (ii) you or your affiliate enter into a lease with us upon standard and commercially reasonable leasing terms, including rent at fair rental value, for a term of 10 years or such shorter term that we specify (if you or your affiliate own the real estate).
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if Itan chooses to exercise its purchase option on a franchisee's salon, and the franchisee or their affiliate owns the real estate, Itan may require that the franchisee or their affiliate enter into a lease with Itan. These leases would be subject to standard and commercially reasonable leasing terms.
The specific terms would include rent at fair rental value and a lease term of 10 years, although Itan reserves the right to specify a shorter term. This means that if Itan decides to purchase the assets of the franchise, they could also require the franchisee to lease the property to them under terms that Itan deems commercially reasonable.
This clause is important for prospective franchisees to consider, especially if they or an affiliate own the real estate where the Itan salon will operate. Itan's ability to dictate the lease terms and duration could significantly impact the franchisee's long-term control over the property and potential rental income. It is advisable to seek legal counsel to fully understand the implications of this clause and negotiate favorable terms where possible.