What was the vacation rate for Itan franchises from January 1, 2022 to June 30, 2022?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
The franchise agreements also require the franchisees to pay the Company a royalty fee of 6% of sales, with the exception of franchises belonging to a related party (see note 5). The franchise agreements also set forth a fee based on the percentage of sales to be contributed to a marketing fund to be spent on advertising for all locations. This fee can be changed from time to time. During the years ended December 31, 2023 and 2022 the marketing fund contribution rate was 4% of sales. A vacation rate of 3.5% was effective from January 1, 2022 to June 30, 2022.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, a vacation rate of 3.5% was in effect from January 1, 2022, to June 30, 2022. This rate likely refers to a temporary reduction or waiver of royalty fees or other payments that franchisees would normally be required to pay to Itan.
For a prospective Itan franchisee, this means that during the specified period, they may have benefited from a reduced financial obligation to the franchisor. This could have provided some financial relief or increased profitability during those months. It is important to note that this vacation rate was temporary and expired on June 30, 2022.
Franchise agreements often include various fees and rates that franchisees must pay, such as royalty fees, marketing fund contributions, and other assessments. These fees are typically calculated as a percentage of sales or based on other factors. A temporary vacation rate, as described in the FDD, can be a short-term incentive or response to specific economic conditions affecting the franchise system.