Regarding Itan franchises, what details are provided in the Manual about calculating Gross Sales related to membership fees?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Sales" means all gross sums you bill or collect from all goods and services sold, plus all other sums you collect from the operation of your Salon including advertising revenue, sponsorship fees and business interruption insurance proceeds. Gross Sales excludes: (a) sales or use taxes; (b) amounts refunded to customers; (c) revenue from the sale of furniture, fixtures and equipment in the ordinary course of business; and (d) tips paid to and retained by staff members as a gratuity. The Manual may include policies governing
the manner in which proceeds from the sale of gift cards are treated for purposes of calculating Gross Sales. The Manual may also provide details on the calculation of Gross Sales relating to membership fees and qualifying purchases and redemptions by members under a customer loyalty or membership program.
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the definition of Gross Sales includes all gross sums billed or collected from goods and services, plus other sums collected from the salon's operation, such as advertising revenue, sponsorship fees, and business interruption insurance proceeds. However, Gross Sales excludes sales or use taxes, amounts refunded to customers, revenue from the sale of furniture, fixtures, and equipment in the ordinary course of business, and tips retained by staff.
Specifically regarding membership fees, the FDD states that the Itan manual may provide details on how to calculate Gross Sales related to membership fees and qualifying purchases and redemptions by members under a customer loyalty or membership program. This implies that the manual contains the specific procedures and guidelines franchisees must follow to accurately calculate and report Gross Sales figures when membership programs are involved.
Prospective Itan franchisees should carefully review the Itan manual to understand the exact methodology for calculating Gross Sales related to membership fees. This is crucial for accurate financial reporting and royalty payments to Itan. Franchisees should also inquire about any updates or clarifications to these policies during their due diligence process to ensure they have the most current information.