Under what condition can Itan waive the minimum 20% ownership requirement for the Managing Owner?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
You must designate an owner with overall responsibility for the management and operation of your Salon (the "Managing Owner"). The Managing Owner must: (a) be approved by us; (b) successfully complete all training programs we require; (c) dedicate full-time efforts to the Business; and (d) at all times hold at least a 20% ownership interest in the franchise (or the entity that is the franchisee under the Franchise Agreement) unless we waive this requirement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 35–36)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the Managing Owner is required to hold at least a 20% ownership interest in the franchise. However, Itan can waive this minimum ownership requirement. The FDD does not specify the conditions under which Itan may grant such a waiver.
Without specific details in the FDD, it is important for prospective franchisees to directly engage with Itan to understand the circumstances under which a waiver of the 20% ownership requirement might be considered. This discussion should clarify what factors Itan takes into account when deciding whether to grant a waiver.
Understanding these conditions is crucial for potential franchisees as it directly impacts the ownership structure and management responsibilities within the franchise. Knowing the waiver conditions allows franchisees to plan their business structure and management roles effectively, ensuring compliance and operational efficiency.