Does Itan have the right to determine how gift card proceeds are divided?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
You must participate in any gift card program we establish and honor all gift cards, even if purchased from us or another Salon.
You may not sell gift cards we have not approved.
We have the right to: (i) determine how gift card proceeds are divided or otherwise accounted for; (ii) require that gift card proceeds be paid to us or deposited into a trust account we control for subsequent disbursement to the Salons(s) where the gift card is redeemed; and (iii) retain proceeds from unredeemed gift cards.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, franchisees must participate in any gift card program that Itan establishes and must honor all gift cards, even those purchased from Itan or another salon. Franchisees are not allowed to sell gift cards that Itan has not approved.
Itan retains significant control over the gift card program. Specifically, Itan has the right to determine how gift card proceeds are divided or otherwise accounted for. Itan can also require that gift card proceeds be paid to them or deposited into a trust account that Itan controls. These funds would then be disbursed to the Itan salons where the gift cards are redeemed.
Furthermore, Itan has the right to retain proceeds from unredeemed gift cards. This means that if a gift card is never used, Itan keeps the money. This is a crucial point for prospective franchisees to consider, as it directly impacts their potential revenue and financial planning. Franchisees should seek clarification on the specific policies and procedures related to gift card programs to fully understand their financial obligations and potential earnings.