Under what circumstances does 'Force Majeure' NOT excuse payment of fees to Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Force Majeure" means acts or circumstances that are beyond a party's control, including fire, storm, flood, earthquake, explosion or accident, acts of war or terrorism, rebellion, insurrection, sabotage, epidemic, failures or delays of transportation and strikes, provided that: (a) the non-performing party promptly notifies the other party of the Force Majeure event; (b) the non-performing party is without fault and the delay or failure could not have been prevented by reasonable precautions by the non-performing party; (c) nothing herein shall excuse or permit any delay or failure to pay fees or other amounts owed on the applicable due date; (d) insolvency, lack of required funds or financing, currency fluctuations, currency devaluations, foreign exchange controls or inflation shall never be deemed Force Majeure; and (e) an epidemic or pandemic of a contagious illness or disease, or economic or financial changes caused by an epidemic or pandemic of a contagious illness or disease, shall never be deemed Force Majeure except to the extent a Governmental Authority mandates closure (or prevents the opening) of the Salon as a result of such epidemic or pandemic.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, a 'Force Majeure' event, defined as circumstances beyond a party's control such as natural disasters, acts of war, or epidemics, generally excuses a party from liability for non-performance, but this does not apply to the payment of fees or other amounts owed to Itan. Specifically, the agreement states that nothing will excuse or permit any delay or failure to pay fees or other amounts owed on the applicable due date.
This means that even if an Itan franchisee experiences a significant disruption due to a 'Force Majeure' event, they are still obligated to pay all fees and amounts owed to Itan on time. This condition is further reinforced by explicitly stating that insolvency, lack of funds or financing, currency fluctuations, currency devaluations, foreign exchange controls, or inflation are never considered 'Force Majeure' events.
Furthermore, while an epidemic or pandemic may be considered a 'Force Majeure' event if a Governmental Authority mandates the closure (or prevents the opening) of the salon, this exception does not extend to excusing the payment of fees. This clause places a significant financial responsibility on the franchisee, as they must continue to meet their financial obligations to Itan even during times of severe business disruption. Prospective franchisees should carefully consider this aspect of the agreement and assess their ability to manage financial obligations during unforeseen circumstances.