When is the Itan development fee due?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF EXPENDITURE 1 | AMOUNT | METHOD OF | WHEN DUE | TO WHOM PAYMENT IS TO BE MADE |
|---|---|---|---|---|
| PAYMENT | ||||
| Development Fee 18 | $129,500 to $199,500 | Lump sum | At time you sign ADA | |
| Initial Investment to Open First Salon | [If Lease Equipment] $230,694 to $427,064 [If Purchase Equipment] $405,194 to $785,564 | This is the total estimated initial investment in Table A above less initial franchise fee, which is included in development fee. |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–18)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the development fee, which ranges from $129,500 to $199,500, is due at the time you sign the Area Development Agreement (ADA). This fee compensates Itan for granting you the rights to develop multiple salon locations within a specific territory. The amount of the fee depends on the number of salons you commit to developing, with the provided initial investment estimate assuming a commitment to develop either 3 (low estimate) or 5 (high estimate) salons. If you plan to develop more than 5 salons, the development fee will increase accordingly.
It is important to note that the development fee covers the right to develop the area and open salons, but it does not include the costs associated with developing any salon other than the first one under the ADA. The initial investment to open the first salon is a separate expense, estimated to be between $360,194 and $985,064, depending on whether you lease or purchase equipment. This initial investment covers various expenses such as the initial franchise fee, training expenses, lease deposits, construction costs, signage, startup package, furniture, technology, equipment, inventory, marketing, and additional funds for the first three months of operation.
Prospective Itan franchisees should carefully consider the financial commitment required for both the development fee and the initial investment to open the first salon. It is advisable to review Item 5 of the FDD, which provides further details on how the development fee is calculated. Additionally, franchisees should factor in the costs associated with developing subsequent salons in their area, as these are not included in the initial investment estimate. Consulting with a financial advisor can help potential franchisees assess their financial readiness and develop a comprehensive business plan for their Itan franchise.