What sections of the Itan Franchise Agreement detail the fees a franchisee must pay?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
e) you obtain all required licenses, permits and approvals from Governmental Authorities;
- (f) your Managing Owner and general managers successfully complete our initial training program;
- (g) you pay all amounts owed to us, our affiliates and suppliers that are due as of the opening date; and
- (h) you comply with all of your other obligations under this Addendum.
Upon our issuance of the Certificate of Conversion Completion, you shall immediately cease operating the Current Business at the Premises and commence operation of your iTAN Salon utilizing our Intellectual Property. At all times prior to issuance of the Certificate of Conversion Completion, including throughout the conversion process, you may, but need not, continue to operate the Current Business at the Premises.
- 6. Grand Opening. Section 10.3(a) of the Franchise Agreement is deleted in its entirety. Within the 30-day period following our issuance of the Certificate of Conversion Completion, you must spend a total of at least $5,000 on advertising and other marketing activities to promote the conversion of your Current Business and reopening as an iTAN Salon, including digital advertising, guerilla marketing and public relations. We must approve all such advertising in accordance with §10.3(a) of the Franchise Agreement. We may specify a grand opening marketing program that you must follow.
- 7. Fees. All fees imposed under the Franchise Agreement shall apply, commencing with the execution of the Franchise Agreement, except as otherwise provided below:
- (a) Initial Franchise Fee. If you operated your Current Business for at least one (1) year prior to execution of the Franch
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 21–22)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Item 23 discusses fees associated with the franchise agreement. Specifically, Section 10.3(a) of the Franchise Agreement, which pertains to grand opening advertising, is modified for conversion salons. Franchisees must spend at least $5,000 on advertising and marketing activities within 30 days of receiving a Certificate of Conversion Completion. Itan must approve all advertising, and Itan may specify a grand opening marketing program that the franchisee must follow.
Item 23 also states that all fees imposed under the Franchise Agreement apply upon execution of the agreement, unless otherwise specified. For franchisees converting an existing business that has operated for at least one year, the initial franchise fee is reduced to $15,000, unless the agreement is executed under an Area Development Agreement. The initial royalty and brand fund fee payments are due the first Wednesday following the Conversion Date, calculated from the Conversion Date through the preceding Sunday. If the Conversion Date falls on a Monday or Tuesday, the first royalty and brand fund fee will be $0.
Additionally, the franchise agreements require franchisees to pay a royalty fee of 6% of sales, except for franchises belonging to a related party. Franchise agreements also stipulate a fee based on a percentage of sales to be contributed to a marketing fund for advertising, which Itan can change over time. During 2022 and 2023, the marketing fund contribution rate was 4% of sales, with a vacation rate of 3.5% effective from January 1, 2022, to June 30, 2022. The initial franchise fee is $49,500, but discounts are available for veterans, conversions, and multi-unit purchases. Veterans receive a 10% discount ($4,950) on their first salon, reducing the fee to $44,550. Conversion discounts reduce the fee to $15,000 for qualifying salons, and multi-unit discounts are available for purchasing multiple franchises simultaneously.