How many Itan franchise locations did KHI own as of December 31, 2023?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
s share common expenses. The Company leases office space from Evolv (see note 4). The Company and the entities under common control are not parties to any arrangements in which they are liable for mutual financial support nor events that would cause the Company to report a loss beyond any amounts reported as receivables.
During the years ended December 31, 2023 and 2022 KHI paid for expenses on behalf of the Company totaling $3,030 and $2,686 and the Company paid for expenses on behalf of KHI totaling $69,478 and $70,777, respectively. For the years ended December 31, 2023 and 2022, $181 and $0, respectively, is due to KHI and is reflected in accounts payable on the balance sheets.
In addition, as of December 31, 2023 and 2022 KHI owns five and eight franchise locations, respectively. Per the franchise agreement, KHI pays no royalty fees
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Kharsa Holdings, Inc. (KHI), a related party, owned five Itan franchise locations as of December 31, 2023. This is a decrease from the eight locations KHI owned as of December 31, 2022.
It is important to note that KHI is under common control of Itan's owner, indicating a close relationship between the franchisee and franchisor. The FDD also states that KHI does not pay royalty fees to Itan, which is an exception to the standard franchise agreement terms that require franchisees to pay 6% of sales as royalty fees. However, KHI does pay marketing fund fees to Itan; for the year ending December 31, 2023, these fees totaled $96,154.
Additionally, KHI owed Itan $6,706 for marketing fees, worker's compensation insurance, supplies, and services for the year ended December 31, 2023. Itan also had a $250,000 receivable from KHI, which is classified as a short-term advance that does not accrue interest. Understanding these related-party transactions is crucial for prospective franchisees to assess the financial health and operational dynamics of Itan.