What is the required action for an Itan franchisee to have their salon considered a 'Qualifying Salon' for the financial performance representation?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
- "Measuring Period" means the period of time commencing January 1, 2024, and expiring December 31, 2024.
- "Qualifying Salon" means any Franchised Salon that satisfies each of the following criteria: (a) the outlet was open and operating throughout the entire Measuring Period; and (b) the outlet provided us with all data we requested in order to prepare the FPR.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 39–42)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, a 'Qualifying Salon' is crucial for inclusion in the financial performance representation (FPR). To have an Itan franchised salon considered a 'Qualifying Salon,' two specific criteria must be met. First, the salon must have been open and operating for the entire 'Measuring Period,' which is defined as January 1, 2024, to December 31, 2024. Second, the franchisee must provide Itan with all requested data necessary to prepare the FPR.
In practical terms, this means that a new Itan franchisee opening a salon in late 2024 would not have their salon's performance included in the 2024 FPR data. Furthermore, even if the salon was open for the entire year, failure to submit the required data to Itan would also disqualify the salon from being included. This data is used to calculate figures like 'Gross Sales' and 'Gross Profit,' which are key metrics in the FPR.
The FPR includes financial data from 'Qualifying Salons' such as annual gross sales, annual cost of goods sold, and annual gross profit. Itan uses this data to present a financial performance representation in Item 19 of the FDD. The document states that as of December 31, 2024, all 28 franchised salons in operation were considered 'Qualifying Salons.'
Prospective franchisees should ensure they understand exactly what data Itan requires and have systems in place to accurately track and report this information. Failure to meet these requirements could mean their salon's performance is not reflected in future FPRs, which could impact potential buyers if the franchisee decides to sell the business.