Must Itan franchisees participate at their own expense in all advertising, promotional, and marketing programs required by Itan?

According to Itan's 2025 Franchise Disclosure Document, franchisees must participate at their own expense in all required advertising, promotional, and marketing programs. This encompasses several key areas, including a Brand Fund fee, local marketing commitments, and participation in advertising cooperatives if established.

Specifically, franchisees must pay a Brand Fund fee, which cannot exceed 2% of gross sales. This fund is used by Itan for various marketing and promotional activities at their discretion. Franchisees are also obligated to spend a minimum amount on local advertising, referred to as the Local Marketing Commitment, which is 2% of gross sales but may increase to a maximum of 3.5% with 30 days' notice. This local marketing expenditure is separate from the Brand Fund fee and grand opening marketing expenses.

Furthermore, if a franchisee's store is located within a region subject to an advertising cooperative, they must participate in the cooperative and pay a cooperative advertising fee. This fee is credited against the Local Marketing Commitment, and any company-owned stores in the cooperative contribute on the same basis as franchisees. These advertising cooperatives are not required to prepare financial statements, but any statements prepared will be available upon request. Itan retains the right to form, change, merge, or terminate these advertising cooperatives at any time.

In addition to these mandatory programs, Itan may create advertising and marketing materials for franchisee use, which may be provided at no additional charge if paid for by the Brand Fund, accessed online for printing at the franchisee's expense, or purchased from third-party suppliers. Franchisees are also required to spend at least $5,000 on grand opening marketing activities, with Itan having the option to recommend a higher amount based on local market conditions. Franchisees must also adhere to Itan's guidelines for their Salon's Instagram account, including pre-approval of content and potential mandatory use of a designated social media company.