Can Itan specify a grand opening marketing program that a franchisee must follow?
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.
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 specify a grand opening marketing program that franchisees must follow. For franchisees converting an existing business to an Itan Salon, they must spend at least $5,000 on advertising and other marketing activities within 30 days of receiving a Certificate of Conversion Completion. These activities aim to promote the conversion and reopening as an Itan Salon and can include digital advertising, guerilla marketing, and public relations. All advertising must be approved by Itan.
For new salons, Itan will assist in developing a grand opening marketing plan, which the franchisee must get approved. Franchisees must implement a grand opening marketing campaign to promote the opening of their salon, following the approved plan and the requirements in Itan's manual. A minimum of $5,000 must be spent on approved grand opening marketing expenditures during the grand opening period, which spans 30 days before the anticipated opening date and extends 60 days after the opening date. Itan may recommend spending more than the minimum $5,000 based on their assessment of local market conditions and the grand opening marketing plan.
After the grand opening period, franchisees must continue to invest in local advertising, spending at least 2% of monthly Gross Sales on local advertising to promote their salon. Itan may increase this Local Marketing Commitment with 30 days' notice, up to a maximum of 3.5% of Gross Sales. Compliance with this requirement is measured on a rolling six-month basis. It's important to note that the grand opening marketing expenditure and brand fund fees are separate from, and not credited towards, the Local Marketing Commitment. Franchisees must also submit advertising expenditure reports to Itan, detailing their spending on both the grand opening campaign and ongoing local advertising.