What obligations does Itan place on franchisees regarding approved suppliers in Item 8, and how does this relate to the assistance Itan provides in Item 11?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
We attempt to negotiate purchase agreements with suppliers, including favorable pricing terms, for the benefit of franchisees. As of the date of this Disclosure Document, we have negotiated purchase agreements (including pricing terms) with suppliers for FIT Bodywraps®, tanning lamps, teeth whitening trays and take-home whitening pens. We may also purchase items in bulk and resell them to you at our cost plus a reasonable markup. Currently there are no purchasing cooperatives but we may establish them in the future. You do not receive any material benefits for using designated or approved suppliers other than having access to any discounted pricing we negotiate.
Franchisor Revenue from Source-Restricted Purchases
We do not currently serve as an approved or designated supplier, but we may do so in the future. Our affiliate, FDTC, is the exclusive supplier for FIT Bodywraps®. Our affiliate, Evolv, is the exclusive supplier for all TANOLOGY® and BRONZE LUMINESSENCE™ skincare products and CALIFORNIA SPA® Ageless Serum, as well as certain branded supplies, such as name tags, bed tents, iTAN tote bags and key tags. FDTC and Evolv may also sell these products to the public and other retailers through other channels of distribution, although iTAN franchisees enjoy discounted pricing not generally available to other purchasers of these products. We may designate ourselves and our affiliates as approved or designated suppliers for other goods and services in the future. We and our affiliates may generate a profit from these purchases. Except for FDTC and Evolv, no person affiliated with us is currently an approved (or the only approved) supplier. Our Chief Executive Officer owns an interest in us (the franchisor) as well as FDTC and Evolv. There are no other approved or designated suppliers in which any of our officers own an interest.
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees are obligated to purchase certain products from approved or designated suppliers. Item 8 states that Itan attempts to negotiate purchase agreements with suppliers, including favorable pricing terms, for the benefit of franchisees. As of the date of the Disclosure Document, Itan has negotiated purchase agreements (including pricing terms) with suppliers for FIT Bodywraps®, tanning lamps, teeth whitening trays, and take-home whitening pens. Itan may also purchase items in bulk and resell them to franchisees at their cost plus a reasonable markup.
Itan's affiliate, FDTC, is the exclusive supplier for FIT Bodywraps®, and their affiliate, Evolv, is the exclusive supplier for all TANOLOGY® and BRONZE LUMINESSENCE™ skincare products and CALIFORNIA SPA® Ageless Serum, as well as certain branded supplies like name tags, bed tents, iTAN tote bags, and key tags. iTAN franchisees enjoy discounted pricing not generally available to other purchasers of these products. The document indicates that Itan and its affiliates may profit from these purchases.
Item 11 outlines Itan's assistance to franchisees, including obligations related to ongoing product/service purchases, as detailed in the Franchise Agreement's Sections 6.2, 6.7 & 11.7. This connects to Item 8, which discusses restrictions on sources of products and services. The table in Item 11 also mentions maintenance, appearance, and remodeling requirements, as well as advertising, which are relevant to ensuring franchisees adhere to brand standards when using the products purchased from approved suppliers. This coordinated approach ensures brand consistency and quality control across all Itan franchise locations.