What is the impact of Itan following the alternative accounting standard for private companies regarding entities under common control?

According to Itan's 2025 Franchise Disclosure Document, the company adheres to an alternative accounting standard tailored for private companies concerning entities under common control. Specifically, Itan does not evaluate these entities under the variable interest subsections of the Financial Accounting Standards Board ("FASB") ASC 810.

For a prospective Itan franchisee, this means that the financial statements might not fully reflect the financial positions of entities under common control with Itan. This could potentially obscure certain risks or liabilities that might exist within these related entities, as they are not being evaluated under the standard FASB guidelines.

It is important for potential franchisees to understand that this accounting practice could limit transparency regarding the overall financial health of related entities. While this approach is permissible under the alternative standard for private companies, franchisees should consider requesting additional information or clarification from Itan regarding these entities to gain a more comprehensive understanding of the company's financial landscape. This may involve asking for details on the nature of the common control relationships and the potential impact on Itan's financial stability.