What was the total accrued benefit related to the Employee Retention Credit (ERC) for Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
, the Company is following the guidance in International Accounting Standards, or IAS, 20, Accounting for Government Grants and Disclosure of Government Assistance. Under the provisions of IAS 20, "a forgivable loan from the government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan." Under IAS 20, government grants are recognized in income as required activities are undertaken. Included in other income on the statement of earnings for the year ended December 31, 2022 is the full amount of the PPP loan, $74,517. No liability for the P
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company received an Employee Retention Credit (ERC) through the CARES Act. This credit was a refundable tax credit against certain employment taxes, amounting to up to $5,000 per employee for eligible employers. The tax credit was calculated as 50% of qualified wages paid to employees during a quarter, with a cap of $10,000 of qualified wages per employee throughout the year.
Itan qualified for this tax credit in the second quarter of 2020 and the second quarter of 2021. The total accrued benefit related to the ERC amounted to $31,452. This credit was included as part of other income on Itan's statement of earnings for the year ending December 31, 2022.
For a prospective franchisee, this information provides insight into how Itan managed to leverage government relief programs during the specified periods. While this credit is a one-time benefit, it demonstrates the company's ability to identify and capitalize on opportunities to improve its financial position. It is important to note that the ERC was a temporary measure, and franchisees should not expect similar credits to be available in the future.