During the term of the Itan development agreement, is Itan permitted to develop or operate a Salon within the Development Territory?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
During the Term we will not develop or operate, or license a third party to develop or operate, a Salon that is physically located within the Development Territory other than: (a) any Salon that is operating, under development, or for which a franchise agreement has been executed, in each case as of the Effective Date, and that is (or will be) located within the Development Territory; and (b) any Salon otherwise permitted by this Section. At any time during the Term we reserve the right to engage in Acquisitions that involve, or subsequently result in, conversion of the acquired or acquiring company's outlets to ITAN® Salons, even if those outlets are located in the Development Territory. We reserve the right to sell, and license third parties to sell, competitive or identical goods and services (including under the Marks) within the Development Territory through Alternative Channels of Distribution.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan is restricted from developing, operating, or licensing a third party to develop or operate a Salon within the Development Territory during the term of the development agreement. However, there are a few exceptions to this restriction.
Itan is permitted to operate Salons that were already operating, under development, or had a franchise agreement executed as of the effective date of the agreement. Itan also retains the right to engage in acquisitions that may involve converting acquired companies' outlets into Itan Salons, even if these outlets are located within the Development Territory. Additionally, Itan reserves the right to sell and license third parties to sell competitive or identical goods and services, including under the Marks, within the Development Territory through alternative channels of distribution.
These stipulations mean that while Itan grants a development territory to the franchisee, this territory is not entirely exclusive. Itan retains some rights to operate or license others to operate within the territory under specific circumstances, such as pre-existing locations or through acquisitions. A prospective franchisee should carefully consider these exceptions and their potential impact on the exclusivity and profitability of their Development Territory.