Will Itan provide franchisees with a financial accounting of Brand Fund contributions and expenditures, and if so, how often?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay the brand fund fee we specify from time to time (not to exceed 2% of Gross Sales). We deposit all brand fund fees and noncompliance fees into the Brand Fund. Company-owned Salons contribute to the Brand Fund on the same basis as franchisees. However, if we modify the amount or timing of required contributions, any company-owned Salon established or acquired after the modification may contribute to the Brand Fund utilizing the modified amount or timing. All monies deposited into the Brand Fund that are not used in the fiscal year in which they accrue will be utilized in the following fiscal year. Any surplus of monies may be invested and we may lend money if there is a deficit. An unaudited financial accounting of Brand Fund contributions and expenditures will be prepared annually and made available to you upon request.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–31)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, an unaudited financial accounting of Brand Fund contributions and expenditures will be prepared annually. This accounting will be made available to franchisees upon request.
This means that while Itan collects a brand fund fee from franchisees (up to 2% of Gross Sales), they also provide a degree of transparency regarding how those funds are used. Franchisees can request to see where their contributions are going, which can help them assess the value and effectiveness of the brand's marketing efforts.
It's important to note that the financial accounting is unaudited, meaning it has not been verified by an independent accounting firm. While this is less rigorous than an audited statement, it still provides some level of insight. Franchisees should be aware that the Brand Fund is not a trust and Itan has no fiduciary obligations regarding its administration. Therefore, Itan has considerable discretion over how the Brand Fund is spent.