If Itan requires a membership model, what rights does Itan retain regarding membership fees?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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; (iii) adopt policies regarding cooperation
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if Itan requires all salons to operate under a membership model, Itan retains specific rights regarding membership fees. Itan has the right to determine how membership fees are divided or accounted for. This means Itan can dictate the allocation of membership revenue among different salons, especially if a member uses services at multiple locations.
Furthermore, Itan can require that all membership fees be paid directly to them or deposited into a trust account controlled by Itan. These funds would then be disbursed to the Itan salons visited by the member. This centralized control allows Itan to manage and distribute membership revenue across the franchise system, ensuring that each salon receives appropriate compensation based on member usage.
These policies regarding membership fees are considered "Program Participation Rules," and Itan can change these rules at any time. Franchisees must comply with any changes Itan makes to these rules. This gives Itan significant control over the financial aspects of the membership model and requires franchisees to adapt to any modifications Itan deems necessary for the program's operation.