Does Itan have the discretion to form, change, merge, or dissolve advertising cooperatives?

According to Itan's 2025 Franchise Disclosure Document, Itan retains the discretion to form, change, merge, or dissolve advertising cooperatives. This means that Itan has the authority to decide whether or not to establish these cooperatives, alter their structure or combine them, or even eliminate them entirely.

This discretion gives Itan significant control over the advertising and marketing strategies employed by its franchisees. While advertising cooperatives can be beneficial for franchisees by pooling resources for regional advertising, Itan's ability to change or dissolve them could impact a franchisee's marketing efforts and budget. Franchisees are required to participate in these cooperatives according to Itan's rules and procedures.

Itan may establish regional advertising cooperatives for the purpose of creating and/or purchasing advertising programs for the benefit of all Salons located in the region. Itan determines the boundaries of the cooperative, specifies the manner in which the cooperative is organized and governed, and requires the cooperative to be administered in accordance with written bylaws, organizational documents or other governing documents that Itan approves.

The franchisee must pay a cooperative advertising fee on each royalty fee due date or such other date specified by the cooperative. Itan may set the minimum cooperative advertising fee or Itan may allow the cooperative to set the cooperative advertising fee based on majority vote of its members. In either case, the fee will not exceed the Local Marketing Commitment. All cooperative advertising fees the franchisee pays are credited towards the Local Marketing Commitment.