Under what condition might Itan waive the minimum Equity Interests ownership requirement for the Managing Owner?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Permitted Transfer" means a Transfer: (a) between existing Owners; or (b) by the Owners to a new Franchisee Entity for which such Owners collectively own and control 100% of the Equity Interests; provided, however, that a Permitted Transfer does not include a Transfer that results in the Managing Owner owning less than 20% of the Equity Interests in the Business or Franchisee Entity.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
Based on the 2025 FDD, Itan defines a "Permitted Transfer" as a transfer of equity interests between existing owners, or to a new entity where the original owners maintain 100% control. However, this is conditional. The managing owner must still retain at least 20% of the equity interests in either the business or the franchisee entity.
This 20% ownership requirement for the Managing Owner is a key condition for a transfer to be considered "Permitted" by Itan. If a transfer would result in the Managing Owner holding less than this threshold, it would not qualify as a Permitted Transfer.
Therefore, Itan does not explicitly state conditions under which they might waive the minimum equity interest. The FDD language focuses on defining what constitutes a "Permitted Transfer" and emphasizes the Managing Owner's minimum equity stake as a requirement for such a transfer. A prospective franchisee should directly ask Itan's franchisor about potential waivers or exceptions to this requirement.