What were the Itan office expenses 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 inco |
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company's office expenses in 2024 totaled $98,068. This figure is part of the operating expenses listed in the financial statement. For comparison, the office expenses in 2023 were $14,371.
It is important to note that Itan also leases office space from a related party, Evolv Brands, Inc., under common ownership. The lease commenced on November 1, 2018, and continues as a month-to-month tenancy. The lease requires monthly payments of approximately $3,133 for rent and common area maintenance. The lease expenses for the years ended December 31, 2024 and 2023 were $37,022 and $35,933, respectively.
Prospective franchisees should be aware of these related-party transactions and how they might affect the overall financial picture. Understanding the details of the lease agreement and the allocation of common expenses is crucial for assessing the financial health and stability of Itan. The significant increase in office expenses from 2023 to 2024 could be due to various factors, such as increased office space, higher utility costs, or changes in accounting practices. It is advisable for potential franchisees to inquire about the reasons for this increase to gain a clearer understanding of the company's financial management.