What were the Itan marketing fund fees in 2024?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
le | 16,029 | 3,765 | | Accrued liabilities (note 7) | 63,191 | 47,595 | | Accrued taxes | 訓 | 60,182 | | Contract liabilities (note 8) | 103,500 | 115,000 | | Deferred tax liability (note 9) | 49,948 | 39,617 | | Note payable - current portion (note 10) | 17,413 | 15,038 | | | 250,081 | 281,197 | | LONG TERM LIABILITIES | | | | Note payable (note 10) | 39,561 | 56,974 | | TOTAL LIABILITIES | 289,642 | 338,171 | | STOCKHOLDER'S EQUITY | | | | Common stock (note 11) | 50,000 | 50,000 | | Additional paid in capital | 38,000 | 38,000 | | Accumulated earnings | 1,724,052 | 1,704,663 | | | 1,812,052 | 1,792,663 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | $ 2,101,694 | $ 2,130,834 |
| 2024 | · | 2023 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| SALES | |||||||||
| Royalties | $ | 863,175 | $ | 746,395 | |||||
| Membership and technology service fees | 32,676 | 22,788 | |||||||
| Franchise renewal fee | 1,000 | = | |||||||
| Area development agreement fees (note 8) | _ | 11,500 908,351 | 769,183 | ||||||
| OPERATING EXPENSES | |||||||||
| Auto | 14,241 | 8,000 | |||||||
| Credit loss | 284 | = | |||||||
| Depreciation | 17,927 | 443 | |||||||
| Dues and subscriptions | 8,507 | 6,945 | |||||||
| Insurance | 72,234 | 85,562 | |||||||
| Office | 98,068 | 14,371 | |||||||
| Outside services | 83,583 | 51,677 | |||||||
| Payroll costs | 392,761 | 207,031 | |||||||
| Professional fees | 75,850 | 25,584 | |||||||
| Lease | 37,022 | 35,933 | |||||||
| Taxes and licenses | 342 | 325 | |||||||
| Training | 12,750 | - | |||||||
| Travel and meetings | 10,311 | 1,249 | |||||||
| Utilities | 18,151 842,031 | 14,555 451,675 | |||||||
| OPERATING INCOME | 66,320 | 317,508 | |||||||
| OTHER INCOME/(EXPENSES) | |||||||||
| Marketing fund fees | 667,682 | 635,751 | |||||||
| Interest income | 7 | - | |||||||
| Interest expense | (3,552) | (4) | |||||||
| Marketing fund expenses | (697,753) | (581,424) | |||||||
| 5 | (33,616) | 54,327 | |||||||
| INCOME BEFORE TAXES | 32,704 | 10- | 371,835 | ||||||
| INCOME TAX EXPENSE (note 9) | (13,315) | (99,689) | |||||||
| NET EARNINGS | $ | 19,389 | $ | 272,146 | |||||
| Shares | Amount | capital | capital | earning | gs | equity | |||
| ------------------------------ | -------- | ------------ | ------------------- | ------ | ------------ | ----- | ------------------------ | ---- | -------- |
| Balance at December 31, 2022 | 1,500 | $ 50,000 | $ 38 | ,000 | $ 1,432, | 517 | $ 1,520,517 | ||
| Net earnings | 272,: | 146 | 272,146 | ||||||
| Balance at December 31, 2023 | 1,500 | 50,000 | 38 | ,000 | 1,704, | 663 | 1,792,663 | ||
| Net earnings | 1.550 2 | 19,: | 389 | 19,389 | |||||
| Balance at December 31, 2024 | 1,500 | $ 50,000 | $ 38 | ,000 | $ 1,724,0 | 052 | $ 1,812,052 | ||
| Page 7 | |||||||||
| ------------------------------------------------------------------------------------------- | ---- | ----------- | ---- | ----------- | |||||
| 2024 | 2023 | ||||||||
| CASH FLOWS (USED)/PROVIDED BY OPERATING ACTIVITIES | |||||||||
| Net earnings | $ | 19,389 | $ | 272,146 | |||||
| ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES | |||||||||
| Depreciation | 17,927 | 443 | |||||||
| Credit loss expense | 284 | - | |||||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable | (29,787) | 4,540 | |||||||
| Prepaid expenses | (4,230) | 74,586 | |||||||
| Prepaid taxes | (6,030) | 5,087 | |||||||
| Income tax receivable | (131,945) | - | |||||||
| Deferred tax asset | (3,592) | (32,366) | |||||||
| Accounts payable | 12,264 | 2,973 | |||||||
| Accrued liabilities | 15,596 | 16,196 | |||||||
| Accrued taxes | (60,182) | 44,709 | |||||||
| Contract liabilities | (11,500) | 115,000 | |||||||
| Deferred tax liability | _ | 10,331 | (5,430) | ||||||
| (190,864) | 9 | 225,738 | |||||||
| NET CASH (USED)/PROVIDED BY OPERATING ACTIVITIES | (171,475) | 497,884 | |||||||
| CASH FLOWS USED BY INVESTING ACT |
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 collected in 2024 were $667,682. This figure represents the aggregate contributions from all franchisees to the marketing fund during that year.
The marketing fund is used at Itan's discretion for advertising and marketing activities. Itan has the authority to determine the content, media, and placement of these activities. While franchisees contribute to the fund, Itan does not guarantee that marketing expenditures will be proportionate to the fees paid by franchisees in any specific geographic area, nor that franchisees will directly benefit in proportion to their contributions.
Itan will provide an annual statement of fund operations, detailing deposits and disbursements, available to franchisees upon request. Itan also retains the right to suspend or discontinue the fund at any time, providing 30 days' prior notice. This gives Itan significant control over the marketing fund and its usage, which may be a consideration for prospective franchisees.
In addition to the general marketing fund, franchisees should be aware of other marketing-related obligations, such as the grand opening marketing spend of at least $5,000 required for converted businesses. Understanding the total marketing commitment, including both fund contributions and individual spending requirements, is crucial for assessing the financial implications of an Itan franchise.