For an Itan franchise, what royalty rate applies from months 13 through 24 after the conversion date?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| ROYALTY RAMP UP SCHEDULE | |||
|---|---|---|---|
| PERIOD OF TIME | APPLICABLE ROYALTY RATE | ||
| (COMMENCING WITH CONVERSION DATE) | |||
| Months 13 through 24 | 5.5% of Gross Sales | ||
| Remainder of Term | 6.5% of Gross Sales |
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the royalty rate for an Itan franchise during months 13 through 24 after the conversion date is 5.5% of Gross Sales. This is part of a royalty ramp-up schedule that Itan offers to new franchisees.
This ramp-up schedule means that franchisees pay a reduced royalty rate during the initial period after opening. This can help franchisees manage their cash flow in the early stages of the business when they are likely to have higher startup costs and may be building their customer base.
After month 24, the royalty rate increases to 6.5% of Gross Sales for the remainder of the franchise term. Franchisees should factor these increasing royalty payments into their long-term financial projections to ensure they can maintain profitability as their royalty obligations increase.