Are Itan franchisees required to pay fees to participate in system-wide programs, and to whom are these fees paid?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
d exterior of the Salon's premises at the intervals we prescribe (or at such earlier times that such actions are required or advisable); and (b) interior and exterior repair of the Salon's premises as needed. You must comply with any maintenance, cleaning or facility upkeep schedule we prescribe.
11.11.System Programs.
- (a) Generally. We may periodically develop and implement membership, loyalty, gift card and other system-wide programs. You must fully participate in all programs we designate as mandatory. In order to participate you must: (i) comply with all policies and procedures we establish for the program; (ii) purchase or license and utilize all equipment, software, mobile applications, technology and others items we designate as being necessary for program participation and pay all associated fees and costs; and (iii) pay us, our affiliate, or a third party we designate, all program fees, contributions or other amounts we require for program participation (collectively, "Program Participation Rules"). Program Participation Rules may be set forth in the Manual. We may change Program Participation Rules at any time and you must comply with the change. We may develop and implement new or successor programs and/or modify or terminate existing programs at any time.
- (b) Membership Program. We may require that all Salons operate under a membership model, in which case your Salon must honor memberships and the associated benefits and privileges even if the member purchased their membership from another Salon. We have the right to: (i) determine how membership fees are divided or otherwise accounted for; (ii) require that all membership fees be paid to us or deposited into a trust account we control for subsequent disbursement to the Salons(s) visited by the member;
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees must participate fully in system-wide programs that Itan designates as mandatory. These programs may include membership, loyalty, and gift card programs. To participate, franchisees must adhere to Itan's policies and procedures, acquire necessary equipment and software, and pay program fees.
Specifically, Itan franchisees are required to pay program fees, contributions, or other amounts to Itan, its affiliates, or a third party designated by Itan. These payments are required for participation in system-wide programs. These "Program Participation Rules" may be outlined in Itan's Manual, which Itan can change at any time.
Itan also mandates participation in customer loyalty programs and gift card programs. Franchisees must honor all gift cards, even those purchased from other Itan locations. Itan has the right to determine how gift card and membership fees are divided, potentially requiring that these proceeds be paid to Itan or deposited into a trust account controlled by Itan for disbursement to the relevant salons.
Franchisees are also responsible for all fees, costs, and expenses related to acquiring, licensing, utilizing, updating, and upgrading required technology systems, some of which must be sourced from third-party suppliers. Additionally, franchisees must pay a brand fund fee equal to 2% of Gross Sales, which is used to promote the Itan brand and improve the system.