Does Itan retain proceeds from unredeemed services in service packages?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
If we require or allow Salons to sell service or treatment "series" or "packages" that may be redeemed on multiple visits, we may adopt policies governing cooperation between franchisees relating to customers who purchase a series or package at one Salon and redeem treatments or services at a different Salon.
We have the right to: (a) determine how sales proceeds are divided or otherwise accounted for; (b) require that sales proceeds be paid to us or deposited into a trust account we control for subsequent disbursement to the Salon(s) where services are redeemed; and (c) retain proceeds from unredeemed services.
You must comply with all policies and procedures we specify from time to time.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan has the right to retain proceeds from unredeemed services when franchisees sell service or treatment packages that can be redeemed over multiple visits. Itan may also adopt policies governing cooperation between franchisees when customers purchase a package at one salon but redeem the services at a different location.
Itan has the right to determine how sales proceeds are divided or accounted for, and can also require that these proceeds be paid to them or deposited into a trust account that Itan controls. This account would then be used for disbursement to the Itan salon where the services are redeemed.
This policy has significant implications for franchisees. It means that Itan ultimately controls the revenue from these service packages and determines how it is distributed. While this may ensure fair distribution across different franchise locations, it also means that franchisees do not have direct access to the revenue from unredeemed services, which could impact their cash flow and profitability. Prospective franchisees should seek clarification from Itan regarding the specific policies and procedures related to the management and distribution of these funds.