What are all the fees an Itan franchisee might pay to the franchisor, considering both Item 5 and Item 6?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
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ITEM 6 OTHER FEES
| Salon | Discount | Initial Franchise Fee | Development Fee (Imposed under ADA) |
|---|---|---|---|
| Salon 1 | No discount (Unless Veterans Discount applies) | $49,500 | N/A – 3 unit minimum for ADA |
| Salon 2 | $7,500 Discount | $42,000 | N/A – 3 unit minimum for ADA |
| Salon 3 | $11,500 Discount | $38,000 | $129,500 |
| Salon 4 | $13,500 Discount | $36,000 | $165,500 |
| Salon 5 | $15,500 Discount | $34,000 | $199,500 |
| Salon 6 | $17,500 Discount | $32,000 | $231,500 |
| 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) |
| FIT Bodywrap® | FDTC | $4,000 | |
| TANOLOGY® skincare products | EVOLV | $150 to $200 | |
| BRONZE LUMINESSENCE™ lotion | EVOLV | $150 | |
| CALIFORNIA SPA® Ageless Serum | EVOLV | $104 | |
| Branded Supplies (e.g., name tags, bed tents, iTAN tote bags and key tags) | EVOLV | $250 | |
| Total | $4,654 to $4,704 | ||
| TYPE OF FEE 1 | AMOUNT 2, 3 | DUE DATE | REMARKS |
| Late Fee | $100 plus default interest at lesser of (a) 18% per annum (prorated on daily basis) or (b) highest rate allowed by applicable law | 10 days after invoice | If we debit your account but there are insufficient funds, or a check you issue is returned due to insufficient funds, then we may charge (in addition to the late fee) an NSF fee of $100 per incident. In California, default interest is limited to 10% per annum. |
| Noncompliance fee | $500 per incident | Upon demand | Imposed if you breach a mandatory standard or operating procedure (including submission of required reports) and fail to cure within the time period we require. We may impose an additional $500 fee every 48 hours the breach remains uncured after we impose the initial fee. We will deposit these fees into the brand fund. |
| Default Reimbursements | All costs we incur to cure your default | 10 days after invoice | If you fail to cure a breach of the Franchise Agreement or our brand standards in the time period we require, we may take steps to cure on your behalf and you must reimburse us for our costs (examples include failure to pay suppliers, maintain insurance or meet quality standards). |
| Management Fee | Greater of 10% of Gross Sales or $350 per day, plus Travel Expenses | 10 days after invoice | If you fail to timely cure a default under the Franchise Agreement, we can designate a person to manage your Salon until the default is cured. |
| Indemnification | Amount of our damages, losses or expenses | 10 days after invoice | You must indemnify us for losses and expenses we incur due to your operation of the Salon or breach of the Franchise Agreement. |
| Attorneys' Fees and Costs | Amount of attorneys' fees and costs we incur | Upon demand | You must reimburse us for all attorneys' fees and costs we incur relating to your breach of the Franchise Agreement or any related agreement. |
| Liquidated Damages | 2 years of royalty & brand fund fees - see Note 4 for calculation | 30 days after invoice | Imposed if we terminate due to your default or you terminate in any ma |
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees can expect to pay several fees to the franchisor. The initial franchise fee is $49,500, but this can be discounted for veterans (to $44,550) or for those converting an existing tanning salon (to $15,000). Multi-unit discounts are also available, reducing the initial franchise fee depending on the number of salons purchased. For example, the initial franchise fee for Salon 7+ is $30,000 per salon.
Beyond the initial franchise fee, Itan franchisees must also pay other fees. These include a royalty fee of 6% of sales and a marketing fund contribution of 4% of sales. There are also fees for specific items such as FIT Bodywrap® ($4,000), TANOLOGY® skincare products ($150 to $200), BRONZE LUMINESSENCE™ lotion ($150), CALIFORNIA SPA® Ageless Serum ($104), and branded supplies ($250). These fees cover various aspects of the franchise operation, from the right to use the Itan brand to ongoing support and marketing efforts.
Additional fees may arise depending on the franchisee's compliance and operational performance. These include a late fee of $100 (plus interest), a noncompliance fee of $500 per incident, and reimbursement for costs Itan incurs to cure a franchisee's default. A management fee (the greater of 10% of gross sales or $350 per day, plus travel expenses) may be imposed if Itan has to step in to manage a salon due to the franchisee's default. Franchisees are also responsible for indemnifying Itan for any losses or expenses resulting from their operation of the salon and for covering Itan's attorneys' fees and costs if they breach the Franchise Agreement. Finally, liquidated damages, calculated as two years of royalty and brand fund fees, may be imposed if the franchise agreement is terminated due to the franchisee's default or if the franchisee terminates the agreement in a manner not permitted.
For franchisees considering an Area Development Agreement (ADA), a development fee is imposed, with the amount varying based on the number of salons. For example, the development fee for Salon 3 is $129,500, while for Salon 7+, it is $261,500 plus an additional $30,000 for each salon in excess of 7. These fees are in addition to the initial franchise fees and other ongoing fees, and they reflect the commitment and investment required for larger-scale development of the Itan brand.