For Itan franchises, how much higher must the Current CPI be than the Baseline CPI before fees can be adjusted?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
We may periodically review and increase these fees based on CPI changes, but only if the then-current CPI ("Current CPI") is more than 5% higher than the corresponding CPI in effect on: (a) the Effective Date of this Agreement (for the initial fee adjustment); or (b) the date we implemented the last fee adjustment (for subsequent fee adjustments) ("Baseline CPI").
The adjusted fee is calculated by multiplying the current fee by the sum of one (1) plus a fraction: (a) the numerator of which is Current CPI minus Baseline CPI; and (b) the denominator of which is Baseline CPI.
We may utilize any CPI index series published by the U.S.
Department of Labor or any comparable Governmental Authority that we deem appropriate.
We currently use the following index: All Urban Wage Earners and Clerical Workers (CPI-W), U.S.
City Average (1982-84 = 100), "All Items".
We will notify you of any CPI adjustment at least 60 days before it becomes effective.
We may implement no more than one (1) fee adjustment during any five (5) year period.
If we decline to exercise our right to increase fees in a given five (5) year period despite a 5% or greater CPI increase, that potential fee increase will accumulate and may be carried forward and applied in connection with a subsequent fee adjustment.
We may also adjust the cap on periodic remodeling expenses in §11.10 at the same time, and in the same manner, as we adjust fees in accordance with this Section.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan may periodically review and increase fees based on changes to the U.S. Consumer Price Index (CPI). However, Itan can only adjust fees if the Current CPI is more than 5% higher than the Baseline CPI. The Baseline CPI is defined as the CPI in effect on the Effective Date of the Franchise Agreement for the initial fee adjustment, or the date Itan implemented the last fee adjustment for subsequent adjustments.
The adjusted fee is calculated by multiplying the current fee by the sum of one (1) plus a fraction. The numerator of the fraction is the Current CPI minus the Baseline CPI, and the denominator is the Baseline CPI. Itan may use any CPI index series published by the U.S. Department of Labor or any comparable Governmental Authority that Itan deems appropriate. Currently, Itan uses the All Urban Wage Earners and Clerical Workers (CPI-W), U.S. City Average (1982-84 = 100), "All Items" index.
Itan will notify franchisees of any CPI adjustment at least 60 days before it becomes effective. Itan may implement no more than one fee adjustment during any five-year period. If Itan declines to exercise its right to increase fees in a given five-year period despite a 5% or greater CPI increase, that potential fee increase will accumulate and may be carried forward and applied in connection with a subsequent fee adjustment. Itan may also adjust the cap on periodic remodeling expenses in §11.10 at the same time, and in the same manner, as Itan adjusts fees in accordance with this Section.