In which quarters did Itan qualify for the Employee Retention Credit (ERC)?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
, the Company is following the guidance in International Accounting Standards, or IAS, 20, Accounting for Government Grants and Disclosure of Government Assistance. Under the provisions of IAS 20, "a forgivable loan from the government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan." Under IAS 20, government grants are recognized in income as required activities are undertaken. Included in other income on the statement of earnings for the year ended December 31, 2022 is the full amount of the PPP loan, $74,517. No liability for the P
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company qualified for the Employee Retention Credit (ERC) in the second quarter of 2020 and the second quarter of 2021. The ERC, established by the CARES Act, is a refundable tax credit against certain employment taxes. Itan received a total accrued benefit of $31,452 related to the ERC.
The tax credit was equivalent to 50% of qualified wages paid to employees during the specified quarters, with a limit of $10,000 of qualified wages per employee for the entire year. This credit is reflected as part of other income on Itan's statement of earnings for the year ended December 31, 2022.
For a prospective Itan franchisee, this information indicates that the franchisor has previously utilized government relief programs to offset employment tax liabilities. While the ERC might not be available in the same form in the future, it demonstrates the company's awareness and utilization of financial relief options, which could be beneficial during economic downturns or unforeseen circumstances. Franchisees should inquire about the availability of similar programs and how Itan supports its franchisees in accessing such benefits.