Under what condition does the initial franchise fee discount not apply to an Itan franchise?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
ll 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 Curr
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, a discount on the initial franchise fee is available to franchisees converting an existing business. Typically, the initial franchise fee is reduced to $15,000 if the franchisee operated their current business for at least one year before signing the Franchise Agreement. However, this discount does not apply if the Franchise Agreement is executed as part of an Area Development Agreement.
In practical terms, this means that if a prospective Itan franchisee is entering into an Area Development Agreement, which grants them the right to develop multiple Itan locations within a specific territory, they will not receive the discounted initial franchise fee, even if they are converting an existing business. The full initial franchise fee will be required for each franchise agreement signed under the Area Development Agreement.
This condition is important for potential Itan franchisees to consider, as it affects the initial investment required. Franchisees should carefully evaluate whether entering into an Area Development Agreement is the right choice for them, considering the trade-off between the benefits of developing multiple locations and the cost of foregoing the initial franchise fee discount. It is crucial to understand the terms and conditions of both the Franchise Agreement and the Area Development Agreement before making a decision.