Are Itan franchisees required to follow Itan's policies and procedures regarding gift card programs?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ith local Laws. We must approve any changes prior to implementation.
- (c) Loyalty Program. You must fully participate and implement all required customer loyalty, rewards and other affinity programs designed to increase customer loyalty, generate new customers or improve overall demand for Salons.
- (d) Gift Card Program. You must participate in any gift card program we establish and honor all gift cards, even if purchased from us or another Salon. You may not sell gift cards we have not approved. We have the right to: (i) determine how gift card proceeds are divided or otherwise accounted for; (ii) require that gift card proceeds be paid to us or deposited into a trust account we control for subsequent disbursement to the Salons(s) where the gift card is redeemed; and (iii) retain proceeds from unredeemed gift cards.
- (e) Processing Customer Payments and Account Transfers. We currently provide electronic funds processing services on your behalf with respect to each customer who has signed a membership or other service agreement with you that authorizes electronic debiting of the customer's account for amounts owed to you. You agree to pay us a monthly EFT processing fee of $10 per month for this service. We will credit your Account for the amount of the customer payment less any applicable bank fees or charges. If any payment owed to us or our affiliate is past due, we may deduct such payment from any monies the customer owes you under the membership or service agreement. We may terminate this service upon 60 days' prior notice.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 36)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees must participate in any gift card program that Itan establishes. This includes honoring all gift cards, even those purchased from Itan or another Itan salon. Franchisees are not allowed to sell gift cards that Itan has not approved.
Itan has the right to determine how gift card proceeds are divided or accounted for, and may also require that these proceeds be paid to them or deposited into a trust account controlled by Itan. These funds would then be disbursed to the Itan salons where the gift cards are redeemed. Itan also retains the right to keep the proceeds from any unredeemed gift cards.
Furthermore, Itan may periodically develop and implement system-wide programs, including gift card programs, and franchisees must fully participate in those programs that Itan designates as mandatory. To participate, franchisees must comply with all policies and procedures established for the program, purchase or license necessary equipment and software, and pay all required program fees or contributions. Itan retains the right to change these program participation rules at any time, and franchisees must comply with these changes. These rules may be set forth in the Manual.