Does the Itan additional funds estimate include the franchisee's salary?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
nsurance policies you must purchase and maintain.
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- Additional Funds: This estimates your expenses during the first 3 months of operation, including: rent ($1,800 to $8,000 per month); payroll costs (excluding any wage or salary paid to you); marketing and advertising expenses; technology fees ($100 to $180 per month); third-party software fees ($200 to $250 per month); bookkeeping fees ($400 to $600 per month); payroll processing fees ($150 to $200 per month); inventory replenishment costs; utilities; and other miscellaneous expenses and required working capital. Your initial 3 months of insurance premium and lease payments for equipment (if you choose to lease the equipment) are separately stated in the table above. These figures are estimates based on the experience of: (a) our Chief Executive Officer in developing, opening and operating company-owned Salons in Southern California; and (b) our franchisees in de
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–18)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the additional funds estimate does not include any wage or salary paid to the franchisee. The additional funds estimate covers expenses during the first 3 months of operation. These expenses include rent, which ranges from $1,800 to $8,000 per month, payroll costs (excluding any wage or salary paid to you), marketing and advertising expenses, technology fees ($100 to $180 per month), third-party software fees ($200 to $250 per month), bookkeeping fees ($400 to $600 per month), payroll processing fees ($150 to $200 per month), inventory replenishment costs, utilities, and other miscellaneous expenses and required working capital.
This means that prospective Itan franchisees should plan to have enough capital to cover their own salary or wages for at least the first three months of operation, in addition to the $10,000 to $40,000 estimated for additional funds. This is a crucial consideration for budgeting and financial planning, as underestimating personal living expenses could put a strain on the business during its initial months.
It is common practice in the franchise industry for the 'additional funds' or 'working capital' estimate to exclude the franchisee's salary. Franchisees are often considered owner-operators, and their compensation is viewed separately from the operational expenses of the business. Therefore, it is important for prospective franchisees to clarify exactly what expenses are covered in the 'additional funds' estimate and to create a comprehensive budget that includes all anticipated business and personal expenses.