What happens to the noncompliance fees collected by Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE 1 | AMOUNT 2, 3 | DUE DATE | REMARKS |
|---|---|---|---|
| Noncompliance fee | $500 per incident | Upon demand | Imposed if you breach a mandatory standard or operating procedure (including submission of required reports) and fail to cure within the time period we require. We may impose an additional $500 fee every 48 hours the breach remains uncured after we impose the initial fee. We will deposit these fees into the brand fund. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, noncompliance fees of $500 per incident are imposed if a franchisee breaches a mandatory standard or operating procedure, including failing to submit required reports, and does not cure the breach within the time period Itan requires. Itan may impose an additional $500 fee every 48 hours the breach remains uncured after the initial fee.
The FDD specifies that Itan will deposit these noncompliance fees into the brand fund. The brand fund, as defined in Item 6, is used for brand and system development to promote public recognition of the Itan brand and improve its system.
This means that noncompliance fees paid by franchisees are not retained by Itan for its own operational revenue. Instead, these funds are specifically earmarked to support the overall Itan franchise system through marketing and system improvements, which could indirectly benefit all franchisees. This is a fairly common practice in franchising, where fees collected for specific infractions are often reinvested into the system as a whole.