What is the amount of the late fee charged by Itan, and what is the default interest rate?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| Salon | Discount | Initial Franchise Fee | Development Fee (Imposed under ADA) |
|---|---|---|---|
| Salon 1 | No discount (Unless Veterans Discount applies) | $49,500 | N/A – 3 unit minimum for ADA |
| Salon 2 | $7,500 Discount | $42,000 | N/A – 3 unit minimum for ADA |
| Salon 3 | $11,500 Discount | $38,000 | $129,500 |
| Salon 4 | $13,500 Discount | $36,000 | $165,500 |
| Salon 5 | $15,500 Discount | $34,000 | $199,500 |
| Salon 6 | $17,500 Discount | $32,000 | $231,500 |
| Salon 7+ | $19,500 Discount (per Salon) STARTUP PACKAGE ITEMS PURCHASED | $30,000 (per Salon) | $261,500 (plus additional $30,000 for each Salon in excess of 7) |
| FIT Bodywrap® | FDTC | $4,000 | |
| TANOLOGY® skincare products | EVOLV | $150 to $200 | |
| BRONZE LUMINESSENCE™ lotion | EVOLV | $150 | |
| CALIFORNIA SPA® Ageless Serum | EVOLV | $104 | |
| Branded Supplies (e.g., name tags, bed tents, iTAN tote bags and key tags) | EVOLV | $250 | |
| Total | $4,654 to $4,704 | ||
| TYPE OF FEE 1 | AMOUNT 2, 3 | DUE DATE |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, a late fee of $100 is charged if payments are not made within 10 days of the invoice date. In addition to the late fee, Itan also charges a default interest rate. This interest rate is the lesser of 18% per annum, prorated daily, or the highest rate allowed by applicable law. However, in California, the default interest is capped at 10% per annum.
This means that if an Itan franchisee is late on a payment, they will incur an immediate $100 late fee. Furthermore, they will accrue interest on the outstanding balance at a rate of 18% per year (or the legal maximum if lower), calculated on a daily basis. For franchisees operating in California, the interest rate will not exceed 10% per year.
It is also important to note that if a payment is debited from the franchisee's account but there are insufficient funds, or if a check is returned due to insufficient funds, Itan may charge an NSF fee of $100 per incident, in addition to the late fee and default interest. This highlights the importance of maintaining sufficient funds in the designated bank account to avoid these additional charges.