When is the Itan Development Fee considered fully earned?

According to Itan's 2025 Franchise Disclosure Document, the Development Fee, along with the initial franchise fees for the Required Salons that it covers, is considered fully earned and nonrefundable upon receipt. This fee is paid by the franchisee to Itan upon the execution of the Area Development Agreement. The Development Fee amount is detailed in Part B of ATTACHMENT "A" of the agreement.

This means that once Itan receives the Development Fee from the franchisee, Itan has fully earned the fee and is under no obligation to refund it, regardless of whether the franchisee successfully opens the planned salons. This policy is a significant risk for franchisees, as they could lose their entire Development Fee if they are unable to fulfill the development schedule outlined in the agreement.

Prospective Itan franchisees should carefully consider their ability to meet the development schedule and secure financing before signing the Area Development Agreement and paying the Development Fee. It is also advisable to seek legal and financial advice to fully understand the implications of this nonrefundable fee policy. Understanding the terms and conditions associated with the Development Fee is crucial for making an informed investment decision.