What are the components of the Itan marketing fund contribution rate after October 1, 2024?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
The franchise agreements also set forth a fee based on the percentage of sales to be contributed to a marketing fund to be spent on advertising for all locations. This fee can be changed from time to time. During the year ended December 31, 2023, the marketing fund contribution rate was 4% of sales. The marketing fund contribution rate remained at 4% of sales through September 30, 2024. Upon October 1, 2024, the marketing fund rate was altered to a cumulative amount of 5.5%, 2% being dedicated to a general fund and 3.5% being directed to a regional fund dependent on the franchisee's location.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the marketing fund contribution rate changed on October 1, 2024. Before this date, the contribution rate was 4% of sales. After October 1, 2024, the marketing fund rate was altered to a cumulative amount of 5.5%.
The 5.5% marketing fund contribution is divided into two parts. Two percent (2%) is dedicated to a general fund, which Itan manages for overall brand advertising and marketing initiatives. The remaining 3.5% is directed to a regional fund.
The regional fund is dependent on the franchisee's location, meaning the money is used for marketing efforts specific to the franchisee's geographic area. This structure allows Itan to tailor marketing strategies to different regions, potentially addressing local market conditions and consumer preferences more effectively. Franchisees should inquire about how the regional fund is managed and how it benefits their specific location.