Are there any exceptions to Itan's restriction on developing or operating a Salon within my development territory after signing the ADA?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the ADA we will not develop or operate, or license a third party to develop or operate, a Salon using our Marks that is located in your development territory other than: (a) any Salon that is located in your development territory as of the date you sign the ADA (either open, under construction or for which a Franchise Agreement has been signed); and (b) as otherwise permitted below with respect to Acquisitions.
We reserve the right to acquire, or be acquired by, another business or chain that may sell competitive or identical goods or services, and those businesses may be converted into Salons operating under the Marks regardless of their location (an "Acquisition"). Any such acquired or converted businesses may be located within your territory and development territory, if applicable.
Source: Item 12 — TERRITORY (FDD pages 31–33)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, there are a couple of exceptions to the territorial protections granted to franchisees with an Area Development Agreement (ADA). Generally, Itan will not develop, operate, or license others to develop or operate a Salon using their Marks within your development territory during the term of the ADA.
However, this restriction does not apply to (a) any Salon already located in your development territory when you sign the ADA, whether it's open, under construction, or has a signed Franchise Agreement, and (b) situations involving Acquisitions. Itan reserves the right to acquire or be acquired by another business, even if that business is a competitor. These acquired businesses can be converted into Itan Salons, regardless of their location, even within your protected development territory.
This means that while you are granted a development territory, Itan retains the right to establish Salons within that territory through acquisitions of existing businesses. As a potential franchisee, it's important to understand that your territorial protections are subject to these exceptions, which could introduce competition within your designated area. It would be prudent to discuss with Itan their acquisition strategy and how it might impact your development territory before signing the ADA.