Does Itan waive its rights under the franchise agreement by accepting payment from a franchisee after a breach?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- 24.4. Waivers. Each party may waive any obligation imposed on the other party in writing.
Neither party is deemed to have waived or impaired any of its rights under this Agreement, including the right to require strict compliance with all terms of this Agreement or terminate this Agreement if the other party fails to comply with such terms, by virtue of: (a) any custom or practice of the parties at variance with the terms of this Agreement; (b) any failure, refusal or neglect by a party to exercise any right under this Agreement or require the other party to strictly comply with any term of this Agreement; (c) our waiver, failure or refusal to exercise any of our rights with respect to other franchisees; or (d) our acceptance of payment from you after your breach.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan's acceptance of payment from a franchisee after a breach of the franchise agreement does not automatically mean that Itan has waived its rights. This means Itan can still pursue remedies for the breach, even after accepting payment. This protection is in place to ensure Itan doesn't inadvertently lose its ability to enforce the franchise agreement due to accepting payments.
This provision protects Itan from being deemed to have waived its rights simply by accepting payments from a franchisee who is in breach of the agreement. For a prospective franchisee, this means that even if Itan continues to accept royalty payments or other fees after a breach, Itan still retains the right to enforce the terms of the franchise agreement, including the right to terminate the agreement if the breach is not cured.
It is important to note that while Itan's acceptance of payment does not automatically constitute a waiver, Itan can still waive its rights, but only if done so explicitly in writing. This requirement for a written waiver provides clarity and avoids misunderstandings about Itan's intentions. This clause is designed to protect Itan's interests and ensure consistent enforcement of the franchise agreement across all franchisees.