Under what conditions is Itan liable to the franchisee for an Interim Manager's actions?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
must also post a conspicuous notice for employees in the back-of-house area explaining your franchise relationship with us and that you (and not we) are the employee's sole employer. We may prescribe the form and content of this notice.
- 8.4. Interim Manager. We may, but need not, designate a Person (an "Interim Manager") to manage your Salon if you fail to cure a material breach before the expiration of the cure period. The Interim Manager will cease to manage your Salon at such time that you cure the material breach. The Interim Manager will not manage your Salon for more than 90 consecutive days without your consent. If we appoint an Interim Manager, you agree to: (a) pay us a management fee equal to the greater of $350 per day or 10% of Gross Sales generated during the period of time the Interim Manager manages your Salon; and (b) reimburse all Travel
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan may designate an Interim Manager to manage a salon if the franchisee fails to correct a material breach within the given cure period. The Interim Manager will cease managing the salon once the breach is resolved but cannot manage the salon for more than 90 consecutive days without the franchisee's consent.
If Itan appoints an Interim Manager, the franchisee must pay Itan a management fee equal to the greater of $350 per day or 10% of the salon's gross sales during the Interim Manager's tenure. The franchisee must also reimburse all travel expenses incurred by the Interim Manager.
However, the Interim Manager is only liable to the franchisee for gross negligence or willful misconduct. Itan is only liable to the franchisee for the Interim Manager's actions if Itan was grossly negligent in appointing the Interim Manager.