What other fees and payments are franchisees obligated to pay to Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
e) you obtain all required licenses, permits and approvals from Governmental Authorities;
- (f) your Managing Owner and general managers successfully complete our initial training program;
- (g) you pay all amounts owed to us, our affiliates and suppliers that are due as of the opening date; and
- (h) you comply with all of your other obligations under this Addendum.
Upon our issuance of the Certificate of Conversion Completion, you shall immediately cease operating the Current Business at the Premises and commence operation of your iTAN Salon utilizing our Intellectual Property. At all 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 Current Business and reopening as an iTAN Salon, including digital advertising, guerilla marketing and public relations. We must approve all such advertising in accordance with §10.3(a) of the Franchise Agreement. We may specify a grand opening marketing program that you must follow.
- 7. Fees. All fees imposed under the Franchise Agreement shall apply, commencing with the execution of the Franchise Agreement, except as otherwise provided below:
- (a) Initial Franchise Fee. If you operated your Current Business for at least one (1) year prior to execution of the Franchise Agreement, your initial franchise fee will be reduced to $15,000; provided however, that if the Franchise Agreement is being executed pursuant to an Area Development Agreement, the foregoing discount shall not apply.
- (b) Royalty and Brand Fund Fee. Your initial payment of royalty fees and brand fund fees shall be due on the first (1st) Wednesday following the Conversion Date and shall be calculated based on Gross Sales generated from the Conversion Date through the close of business on the Sunday immediately preceding your first royalty fee due date. For purposes of clarity, if your Conversion Date occurs on a Monday or Tuesday, your first royalty fee and brand fund fee shall be $0.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees must pay several other fees in addition to the initial franchise fee and royalty fee. Itan franchisees are obligated to pay all other fees, expense reimbursements, and other amounts specified in the Franchise Agreement in a timely manner. Franchisees must also promptly pay an amount equal to all taxes levied or assessed against Itan based on goods or services the franchisee sells or goods or services Itan furnishes to the franchisee, excluding income taxes imposed on Itan based on fees the franchisee pays under the Franchise Agreement.
If any sum due under the Franchise Agreement is not received by Itan when due, or if there are insufficient funds in the franchisee's account to cover the sum when due, the franchisee must pay Itan $100 plus default interest on the amount past due. The default interest rate is the lesser of 18% per annum (pro-rated on a daily basis) or the highest rate permitted by applicable law. Itan may charge franchisees a fee of up to $5 in connection with the transfer of a customer's account to the franchisee if the customer obtains more than 60% of their service sessions from the franchisee's salon over at least three consecutive months.
Itan franchisees must pay a monthly EFT processing fee of $10 per month for electronic funds processing services provided by Itan for customers with membership or service agreements authorizing electronic debiting of their accounts. Franchisees must spend a total of at least $5,000 on advertising and other marketing activities to promote the conversion of their current business and reopening as an Itan Salon within the 30-day period following Itan's issuance of the Certificate of Conversion Completion. This includes digital advertising, guerilla marketing, and public relations, all of which must be approved by Itan.