Is the Itan Development Fee refundable?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
The Development Fee imposed by §6 is deemed to include and satisfy the initial franchise fee imposed under each Franchise Agreement you sign for a Required Salon.
- 6. DEVELOPMENT FEE. Upon execution of this Agreement, you must pay us a development fee (the "Development Fee") in the amount set forth in Part B of ATTACHMENT "A". The Development Fee is calculated as the sum of the initial franchise fees applicable to all Required Salons listed in the Development Schedule. The Development Fee, and the initial franchise fees for the Required Salons comprised by the Development Fee, are fully earned and nonrefundable upon receipt.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the Development Fee is generally nonrefundable. Specifically, the Development Fee is paid upon the execution of the Area Development Agreement and is calculated as the sum of the initial franchise fees applicable to all Required Salons listed in the Development Schedule.
The FDD states explicitly that the Development Fee, along with the initial franchise fees for the Required Salons that comprise it, are fully earned by Itan upon receipt and are nonrefundable. This means that once the Area Development Agreement is signed and the fee is paid, a franchisee cannot get this money back, regardless of whether they successfully open all the salons outlined in the development schedule.
This nonrefundable policy is a significant consideration for potential Itan area developers. It highlights the importance of carefully evaluating the development schedule, market potential, and personal financial situation before committing to an Area Development Agreement. Prospective franchisees should conduct thorough due diligence and seek professional advice to fully understand the financial implications of this nonrefundable fee.