Under what conditions is Itan not responsible for breaches related to the supply of goods?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Provided that we designate or approve system suppliers in good faith, we have no liability to you for their acts, errors or omissions including, without limitation, defective or tainted goods, delayed delivery or inability to meet demand.
With respect to goods purchased from us or our affiliate, you acknowledge that we or our affiliate purchase the goods from third-party manufacturers or suppliers and resell them to you as a convenience.
If you have any type of Claim relating to the purchase of goods or services from a system supplier, your sole recourse shall be against the supplier.
If we or our affiliate are the supplier, your sole recourse shall be against the manufacturer or supplier from whom we or our affiliate acquired the goods unless both: (i) the Claim arises from our (or our affiliate's) failure to supply the
goods in breach of our obligations under this Agreement; and (ii) our (or our affiliate's) failure to supply the goods is not caused by a Force Majeure event. We and our affiliates make no warranties or representations and expressly disclaim all warranties and representations, including the implied warranties of merchantability and fitness for a particular purpose, with respect to goods or services you purchase from system suppliers.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan is generally not liable for issues arising from system suppliers, provided they designate or approve these suppliers in good faith. This includes problems like defective goods, delivery delays, or inability to meet demand. If a franchisee has a claim related to goods or services purchased from a system supplier, the franchisee's sole recourse is against that supplier, not Itan.
However, if Itan or its affiliate is the supplier, the franchisee's recourse is against the original manufacturer or supplier from whom Itan acquired the goods. An exception exists if the claim arises from Itan's failure to supply goods in breach of their obligations and this failure is not due to a Force Majeure event.
This means that as an Itan franchisee, you are primarily responsible for resolving issues directly with the suppliers. It is important to understand the terms and conditions of supply agreements and to address any disputes directly with the supplier. The 'Force Majeure' exception also highlights the importance of understanding what events are defined as such, as Itan is not responsible for failures to supply goods if those failures are caused by these events.