During the term of the franchise agreement, is Itan prohibited from developing or operating a Salon, or licensing a third party to do so, within my exclusive territory, except in cases of acquisitions or alternative channels of distribution?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
e hereby grant you (a) the right and obligation to develop, open and operate each of the Required Salons referred to in the Development Schedule; and (b) the option, but not the obligation, to develop, open and operate one (1) or more Optional Salons during the Term in accordance with §4.2. All Salons developed pursuant to this Agreement (including Optional Salons and Required Salons) must be located within the Development Territory. This Agreement does not grant you any right or license to use our Intellectual Property.
- 3. TERRITORIAL PROTECTIONS AND LIMITATIONS. 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.
4. DEVELOPMENT OBLIGATIONS
- 4.1. Required Salons. You must develop, open and operate all Required Salons listed in the Development Schedule. You must develop and open each Required Salon in strict compliance with the opening dates set forth in the Development Schedule.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan provides territorial protections to its franchisees during the term of the agreement. Itan will not develop, operate, or license a third party to develop or operate a Salon within the franchisee's territory. However, there are a few exceptions to this rule.
First, Itan can operate or license a Salon within the territory if it was already operating, under development, or had a franchise agreement executed before the effective date of the current franchise agreement. Second, Itan retains the right to engage in acquisitions, even if those acquisitions result in the conversion of acquired companies' outlets to Itan Salons within the franchisee's territory.
Finally, Itan reserves the right to sell and license third parties to sell competitive or identical goods and services, including under the Itan marks, within the franchisee's territory through alternative channels of distribution. This means that while Itan aims to protect the franchisee's territory, it retains some flexibility to expand its brand through acquisitions and alternative distribution methods.