Under what conditions does Itan impose a noncompliance fee?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE 1 | AMOUNT 2, 3 | DUE DATE | REMARKS |
|---|---|---|---|
| Noncompliance fee | $500 per incident | Upon demand | Imposed if you breach a mandatory standard or operating procedure (including submission of required reports) and fail to cure within the time period we require. We may impose an additional $500 fee every 48 hours the breach remains uncured after we impose the initial fee. We will deposit these fees into the brand fund. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, a noncompliance fee of $500 per incident is imposed if a franchisee breaches a mandatory standard or operating procedure, including the submission of required reports, and fails to correct the breach within the time period Itan requires. Itan may impose an additional $500 fee every 48 hours the breach remains uncorrected after the initial fee is imposed. These fees will be deposited into the brand fund. The fee is due upon demand.
This means that if an Itan franchisee violates any of the brand's mandatory standards, such as those related to cleanliness, customer service, or reporting requirements, they will be subject to a $500 fine. This fee is charged for each instance of noncompliance.
Furthermore, the franchisee will continue to be penalized $500 every two days (48 hours) that the violation remains unresolved after the initial fee. This escalating fee structure is designed to encourage prompt correction of any issues. The funds collected from these noncompliance fees are allocated to the brand fund, which Itan uses to support the overall brand and system development.
It is important for prospective Itan franchisees to carefully review the franchise agreement and operating manual to understand all mandatory standards and procedures to avoid incurring these noncompliance fees. Franchisees should also ensure they have systems in place to monitor compliance and address any issues promptly.