Does Itan reimburse itself for administrative expenses incurred to administer the Brand Fund?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
We administer the Brand Fund to promote public awareness of our brand and improve our System. We may use the Brand Fund to pay for any of the following in our discretion:
- developing, distributing or administering advertising and marketing materials and programs
- conducting and administering promotions, contests or giveaways
- public and consumer relations and publicity
- brand development
- sponsorships and charitable and nonprofit donations and events
- research and development of technology, products and services
- website development and search engine optimization
- development, maintenance and promotion of an ecommerce platform
- development and implementation of quality control programs
- conducting market research
- changes and improvements to the System
- fees and expenses charged by advertising agencies we engage to provide marketing services
- collecting and accounting for brand fund fees and preparing financial accountings of the Brand Fund
- legal fees to defend claims brought against you and/or the fund based on fund expenditures or activities
- any other programs or activities we deem appropriate to promote or improve the System reimbursing us for administrative, overhead and other expenses we incur to administer the Brand Fund, including compensation paid to our personnel for time spent working on Brand Fund matters
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, Itan does reimburse itself for administrative, overhead, and other expenses incurred to administer the Brand Fund. This includes compensation paid to Itan's personnel for time spent working on Brand Fund matters.
Specifically, Itan has complete control and discretion over all advertising programs paid for by the Brand Fund. Franchisees are required to pay a brand fund fee, which cannot exceed 2% of gross sales. These fees, along with noncompliance fees, are deposited into the Brand Fund. Company-owned salons also contribute to the Brand Fund on the same basis as franchisees.
For the fiscal year ended December 31, 2024, 18.4% of the marketing funds were allocated to administrative expenses. This means that a portion of the fees paid by franchisees is used to cover Itan's costs of managing the Brand Fund. Franchisees have the right to request an unaudited financial accounting of Brand Fund contributions and expenditures annually.