What expenses and financial obligations must be covered by the business interruption insurance for an Itan Salon?

According to Itan's 2025 Franchise Disclosure Document, franchisees are required to maintain business interruption insurance. This insurance must provide coverage for 100% of all expenses and financial obligations for a minimum period of 12 months. This includes fees owed to Itan.

The fees owed to Itan that must be covered by the business interruption insurance are defined as average weekly royalty fees and brand fund fees. These fees are calculated based on the 52-week period preceding the event that triggers coverage under the insurance policy. This ensures that Itan continues to receive its expected revenue stream even if the franchisee's salon is temporarily closed due to an unforeseen event.

For a prospective Itan franchisee, this requirement means factoring in the cost of adequate business interruption insurance into their operating budget. It is crucial to select a policy that fully covers all potential expenses and financial obligations, including the ongoing royalty and brand fund fees. Failure to maintain adequate insurance coverage could result in the franchisee being personally liable for these costs in the event of a business interruption.