Under the Itan franchise agreement, what is considered a 'Force Majeure' event?

According to Itan's 2025 Franchise Disclosure Document, a 'Force Majeure' event includes acts or circumstances beyond a party's control. These events specifically encompass fire, storm, flood, earthquake, explosion or accident, acts of war or terrorism, rebellion, insurrection, sabotage, epidemic, failures or delays of transportation, and strikes. However, to qualify as a 'Force Majeure' event under the Itan franchise agreement, several conditions must be met.

First, the non-performing party must promptly notify the other party of the event. Second, the non-performing party must be without fault, and the delay or failure could not have been prevented by reasonable precautions. Importantly, 'Force Majeure' does not excuse delays or failures to pay fees or other amounts owed to Itan on the applicable due date. Additionally, insolvency, lack of required funds or financing, currency fluctuations, currency devaluations, foreign exchange controls, or inflation are explicitly excluded from being considered 'Force Majeure' events.

Furthermore, the Itan franchise agreement stipulates that an epidemic or pandemic of a contagious illness or disease, or economic or financial changes caused by such events, are generally not considered 'Force Majeure.' An exception exists only if a Governmental Authority mandates the closure (or prevents the opening) of the Salon as a direct result of such an epidemic or pandemic. This definition and its conditions are important for prospective franchisees to understand, as they dictate when Itan will excuse a franchisee's non-performance due to unforeseen circumstances.