What happens to the brand fund fees and noncompliance fees collected by Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay the brand fund fee we specify from time to time (not to exceed 2% of Gross Sales). We deposit all brand fund fees and noncompliance fees into the Brand Fund. Company-owned Salons contribute to the Brand Fund on the same basis as franchisees. However, if we modify the amount or timing of required contributions, any company-owned Salon established or acquired after the modification may contribute to the Brand Fund utilizing the modified amount or timing. All monies deposited into the Brand Fund that are not used in the fiscal year in which they accrue will be utilized in the following fiscal year. Any surplus of monies may be invested and we may lend money if there is a deficit. An unaudited financial accounting of Brand Fund contributions and expenditures will be prepared annually and made available to you upon request. During the fiscal year ended December 31, 2024 we spent the marketing funds in the following manner:
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–31)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, all brand fund fees and noncompliance fees are deposited into the Brand Fund. Company-owned salons contribute to the Brand Fund on the same basis as franchisees. If Itan modifies the amount or timing of required contributions, any company-owned salon established or acquired after the modification may contribute to the Brand Fund utilizing the modified amount or timing.
All monies deposited into the Brand Fund that are not used in the fiscal year in which they accrue will be utilized in the following fiscal year. Any surplus of monies may be invested, and Itan may lend money if there is a deficit. An unaudited financial accounting of Brand Fund contributions and expenditures will be prepared annually and made available to franchisees upon request.
During the fiscal year ended December 31, 2024, Itan spent the marketing funds in a manner not specified in this excerpt. As a prospective franchisee, it would be prudent to request and carefully review the unaudited financial accounting of Brand Fund contributions and expenditures to understand how the funds are being utilized and to assess the effectiveness of the marketing programs.