What is the development fee for Salon 7+ under the Itan franchise agreement, and how does it increase with additional salons?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| Salon | Discount | Initial Franchise Fee | Development Fee (Imposed under ADA) |
|---|---|---|---|
| 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) |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the development fee for Salon 7+ is $261,500. The agreement also stipulates an additional $30,000 for each salon in excess of 7. This fee is imposed under the Area Development Agreement (ADA), which requires a minimum of 3 units.
For a prospective Itan franchisee, this means that while the initial development fee for the seventh salon is substantial, it increases incrementally for each additional salon beyond that. This structure incentivizes franchisees to commit to a specific number of locations upfront, as the development fee grows with each new salon added to the agreement. It is important to note that this fee is in addition to the initial franchise fee, which is $30,000 per salon for Salon 7+.
This type of tiered development fee structure is common in franchising, as it allows franchisors to secure commitments for multiple locations while providing some level of discount or incentive for larger-scale development. Franchisees should carefully consider their expansion plans and financial capabilities before committing to an Area Development Agreement with Itan, as the development fees can represent a significant investment.