For Itan, is a transfer between existing Owners always considered a 'Permitted Transfer'?

According to Itan's 2025 Franchise Disclosure Document, a transfer between existing Owners is generally considered a 'Permitted Transfer.' However, this is conditional. A transfer is only considered 'Permitted' if it does not result in the Managing Owner owning less than 20% of the Equity Interests in the Business or Franchisee Entity. This condition applies to both transfers between existing Owners and transfers by the Owners to a new Franchisee Entity where the Owners collectively own and control 100% of the Equity Interests.

This stipulation is significant for prospective Itan franchisees because it restricts the ability of the Managing Owner to reduce their equity below a certain threshold (20%) through transfers without potentially losing the 'Permitted Transfer' status. If a transfer causes the Managing Owner's equity to fall below this level, the transfer may not be automatically approved and could be subject to additional scrutiny or requirements by Itan.

It is important for franchisees to understand these transfer conditions, as non-permitted transfers are considered a breach of the agreement and are void without Itan's prior approval. This ensures that Itan maintains a degree of control over who owns and manages its franchises, safeguarding the brand and operational consistency. Franchisees should carefully consider these implications when planning any ownership changes or equity transfers within their Itan franchise.