What is the exception regarding the initial franchise fee for each Itan Franchise Agreement executed pursuant to the Development Agreement?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ll times prior to issuance of the Certificate of Conversion Completion, including throughout the conversion process, you may, but need not, continue to operate the Current Business at the Premises.
- 6. Grand Opening. Section 10.3(a) of the Franchise Agreement is deleted in its entirety. Within the 30-day period following our issuance of the Certificate of Conversion Completion, you must spend a total of at least $5,000 on advertising and other marketing activities to promote the conversion of your Curr
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the initial franchise fee for each Franchise Agreement executed under the Area Development Agreement has an exception. Specifically, if a franchisee operated their Current Business for at least one year prior to executing the Franchise Agreement, they may qualify for a reduced initial franchise fee of $15,000. However, this discount does not apply if the Franchise Agreement is executed pursuant to an Area Development Agreement.
In simpler terms, while a standard Itan franchisee might get a discount on the initial franchise fee based on their prior business experience, this discount is not available to those who are developing multiple Itan locations under an Area Development Agreement. This means that area developers should anticipate paying the full initial franchise fee for each location they open, regardless of their prior business experience.
This exception is important for prospective Itan area developers to understand because it affects their initial investment costs. When budgeting for multiple locations, developers cannot rely on the potential discount that might be available to single-unit franchisees. This could significantly impact the financial planning and overall profitability projections for the development agreement.