What were the Itan marketing fund fees in 2022?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| 60,182 | 15,473 | | Contract liabilities (note 8) | 115,000 | - | | Deferred tax liability (note 9) | 39,617 | 45,047 | | Note payable - current portion (note 10) | 15,038 | - | | | 281,197 | 92,711 | | LONG TERM LANGUETES | | | | LONG TERM LIABILITIES | FC 074 | | | Note payable (note 10) | 56,974 | | | TOTAL LIABILITIES | 338,171 | 92,711 | | STOCKHOLDER'S EQUITY | | | | Common stock (note 11) | 50,000 | 50,000 | | Additional paid in capital | 38,000 | 38,000 | | Accumulated earnings | 1,704,663 | 1,432,517 | | | 1,792,663 | 1,520,517 | | TOTAL MARKITISS AND STOCKHOLDS PICTORY | | 4 640 065 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | $ 2,130,834 | $ 1,613,228 |
| 2023 | 2022 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SALES | _ | 1 | ||||||||||||
| Royalties | $ | 746,395 | $ | 685,019 | ||||||||||
| Membership and technology service fees | 22,788 | 24,761 | ||||||||||||
| Salon transfer fees | ~ | 24,000 | ||||||||||||
| Franchise renewal fee | 769,183 | 12 | 4,000 737,780 | |||||||||||
| OPERATING EXPENSES | ||||||||||||||
| Auto | 8,000 | 8,286 | ||||||||||||
| Depreciation | 443 | 1,543 | ||||||||||||
| Dues and subscriptions | 6,945 | 3,493 | ||||||||||||
| Franchise marketing | = | 54 | ||||||||||||
| Insurance | 85,562 | 75,633 | ||||||||||||
| Office | 14,371 | 7,906 | ||||||||||||
| Outside services | 51,677 | 14,419 | ||||||||||||
| Payroll costs | 207,031 | 238,355 | ||||||||||||
| Professional fees | 25,584 | 27,707 | ||||||||||||
| Lease | 35,933 | 35,112 | ||||||||||||
| Taxes and licenses | 325 | 325 | ||||||||||||
| Travel and meetings | 9,249 | 8,677 | ||||||||||||
| Utilities | 14,555 451,675 | ë- | 13,210 426,434 | |||||||||||
| OPERATING INCOME | 317,508 | 311,346 | ||||||||||||
| OTHER INCOME/(EXPENSES) | ||||||||||||||
| Marketing fund fees | 635,751 | 591,317 | ||||||||||||
| Other income (note 12) | 12 | 105,969 | ||||||||||||
| Interest income | 12 | 286 | ||||||||||||
| Loss on disposal of asset | H | (900) | ||||||||||||
| Marketing fund expenses | (581,424) 54,327 | (657,115) 39,557 | ||||||||||||
| INCOME BEFORE TAXES | 371,835 | 350,903 | ||||||||||||
| INCOME TAX EXPENSE (note 9) | (99,689) | ş | (117,133) | |||||||||||
| NET EARNINGS | $ | 272,146 | $ | 233,770 | ||||||||||
| Commo | n stock | itional id in | Accumulated | Total stockholder's | ||||||||||
| ------------------------------ | -------- | ---- |
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the total marketing fund fees were $591,317 in 2022. This figure represents the aggregate amount collected from all franchisees and potentially other sources, which Itan uses for marketing and advertising activities.
Itan franchisees should note that the marketing fund contribution rate was 4% of sales during 2022. However, the FDD indicates that Itan can change this fee from time to time. In fact, the marketing fund contribution rate changed to a cumulative amount of 5.5% on October 1, 2024, with 2% being dedicated to a general fund and 3.5% being directed to a regional fund dependent on the franchisee's location.
Itan retains sole discretion over the marketing fund's content, concepts, materials, media, and other aspects of marketing and advertising. The FDD explicitly states that Itan does not ensure expenditures are proportionate to fees paid by franchisees in a specific geographic area, nor does it guarantee franchisees will directly benefit in proportion to their contributions. While Itan will provide an annual statement of fund operations upon request, franchisees should recognize that the fund is not a trust, and Itan has no fiduciary obligations regarding its administration.