Under what circumstances would an Itan franchisee be required to sign a Conversion Addendum?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
In some cases, we allow the owner of a pre-existing tanning salon to purchase a franchise and convert their preexisting tanning salon to an iTAN Salon (a "Conversion Salon"). If you are acquiring franchise rights for a Conversion Salon, you must sign the Conversion Addendum attached to this Disclosure Document as EXHIBIT "H"-3. If you operated your pre-existing tanning salon for at least 1 year prior to signing the Franchise Agreement (a "Qualifying Conversion Salon"), you may receive a discount on your initial franchise fee (see Item 5) and a lower royalty fee during the initial 2 years after you convert to an iTAN Salon (see Item 6).
Source: Item 22 — CONTRACTS (FDD pages 43–44)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, a franchisee is required to sign a Conversion Addendum if they are purchasing a franchise to convert their pre-existing tanning salon into an Itan Salon. This scenario is specifically for owners of existing tanning salons who wish to rebrand and operate as an Itan franchise. The Conversion Addendum is attached to the Disclosure Document as EXHIBIT "H"-3.
Franchisees who operated their pre-existing tanning salon for at least one year prior to signing the Franchise Agreement may be eligible for certain benefits. These benefits include a potential discount on the initial franchise fee, as detailed in Item 5 of the FDD, and a reduced royalty fee for the first two years following the conversion to an Itan Salon, as outlined in Item 6.
The Conversion Addendum modifies the standard Franchise Agreement to account for the specific requirements and processes involved in converting an existing business. This ensures that both Itan and the franchisee are aligned on the necessary steps for a successful conversion, including remodeling, rebranding, and adherence to Itan's operational standards.