What is the maximum default interest rate per annum that Itan can charge in California?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| Salon | Discount | Initial Franchise Fee | Development Fee (Imposed under ADA) |
|---|---|---|---|
| Salon 1 | No discount (Unless Veterans Discount applies) | $49,500 | N/A – 3 unit minimum for ADA |
| Salon 2 | $7,500 Discount | $42,000 | N/A – 3 unit minimum for ADA |
| Salon 3 | $11,500 Discount | $38,000 | $129,500 |
| Salon 4 | $13,500 Discount | $36,000 | $165,500 |
| Salon 5 | $15,500 Discount | $34,000 | $199,500 |
| Salon 6 | $17,500 Discount | $32,000 | $231,500 |
| Salon 7+ | $19,500 Discount (per Salon) STARTUP PACKAGE ITEMS PURCHASED | $30,000 (per Salon) | $261,500 (plus additional $30,000 for each Salon in excess of 7) |
| FIT Bodywrap® | FDTC | $4,000 | |
| TANOLOGY® skincare products | EVOLV | $150 to $200 | |
| BRONZE LUMINESSENCE™ lotion | EVOLV | $150 | |
| CALIFORNIA SPA® Ageless Serum | EVOLV | $104 | |
| Branded Supplies (e.g., name tags, bed tents, iTAN tote bags and key tags) | EVOLV | $250 | |
| Total | $4,654 to $4,704 | ||
| TYPE OF FEE 1 | AMOUNT 2, 3 | DUE DATE | REMARKS |
| Late Fee | $100 plus default interest at lesser of (a) 18% per annum (prorated on daily basis) or (b) highest rate allowed by applicable law | 10 days after invoice | If we debit your account but there are insufficient funds, or a check you issue is returned due to insufficient funds, then we may charge (in addition to the late fee) an NSF fee of $100 per incident. In California, default interest is limited to 10% per annum. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the default interest rate that Itan can charge is dependent on the location of the franchise. Generally, Itan charges a late fee of $100 plus default interest at the lesser of (a) 18% per annum (prorated on a daily basis) or (b) the highest rate allowed by applicable law.
However, for franchisees operating in California, there is a specific stipulation. In California, the default interest is limited to 10% per annum. This means that even if 18% or another rate is the highest allowed by law, Itan will only charge a maximum of 10% per annum on overdue amounts for franchisees in California.
This is an important consideration for prospective franchisees in California, as it caps the potential financial burden of late payments compared to franchisees in other states where the 18% or highest legally permissible rate might apply. Franchisees should be aware of these location-specific differences in fee structures.