How does the initial Itan franchise fee in Item 5 relate to the estimated initial investment in Item 7?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ase of area development rights for 3 to 5 Salons.
| TYPE OF EXPENDITURE 1 | AMOUNT | METHOD OF | WHEN DUE | TO WHOM PAYMENT IS TO BE MADE |
|---|---|---|---|---|
| PAYMENT | ||||
| Development Fee 18 | $129,500 to $199,500 | Lump sum | At time you sign ADA | |
| Initial Investment to Open First Salon | [If Lease Equipment] $230,694 to $427,064 [If Purchase Equipment] $405,194 to $785,564 | This is the total estimated initial investment in Table A above less initial franchise fee, which is included in development fee. | ||
| Total Estimated Initial | $360,194 to $626,564 (if lease equipment) | |||
| Investment | $534,694 to $985,064 (if purchase equipment) |
Notes:
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- Financing and Refunds: We do not offer direct or indirect financing. No amounts paid to us are refundable. We are not aware of any amounts paid to third-party suppliers that are refundable, although your landlord may refund your security deposit at the end of the lease if you do not damage the property or default.
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What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the initial franchise fee is part of the total estimated initial investment. Item 5 states that the initial franchise fee is $49,500, which is paid when signing the Franchise Agreement. This fee is generally uniformly imposed, but discounts are available for veterans, conversions, and multi-unit purchases.
Item 7 provides a detailed breakdown of the estimated initial investment required to open an Itan salon. Table A in Item 7 lists the initial franchise fee of $49,500 as a component of the total estimated initial investment. The total estimated initial investment ranges from $280,194 to $476,564 if equipment is leased, and from $454,694 to $835,064 if equipment is purchased. These totals include various costs such as lease deposits, construction, signage, startup packages, furniture, technology, equipment, inventory, marketing, and additional funds for the first three months of operation.
Item 7 also clarifies how the initial franchise fee relates to the development fee for franchisees who commit to developing multiple salons. The initial investment to open the first salon, after the development fee is paid, ranges from $230,694 to $427,064 if leasing equipment and $405,194 to $785,564 if purchasing equipment. The total estimated initial investment, including the development fee, ranges from $360,194 to $626,564 if leasing equipment and $534,694 to $985,064 if purchasing equipment. Therefore, the initial franchise fee is a component of the initial investment, but it is accounted for differently when a development fee is involved for multiple salons.