What does the 'Additional Funds Three Months' estimate for a Chatime store exclude?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
This is an estimate of the funds needed for business (not personal) expenses during the first three months of operation of your Chatime Store and includes the estimated costs of sales and operating expenses incurred during the initial month of operation (such as payroll, utilities, taxes and, other expenses).
This estimate excludes owners' salaries or draws and non-Chatime Store management expenses.
Your actual costs may be higher.
Cash flow from your operations may not be adequate to cover operating and other costs during the initial phase of business.
Your costs will depend on factors such as how well you follow our recommended method and procedures, your management, marketing, and general business skills, local economic conditions, the local market for your products and services, competition, local cost factors, and your Chatime Store's sales levels.
There is no guarantee that the amounts specified are adequate or that additional investment by you will not be necessary during the first three months of initial operation or afterwards.
We have relied on our experience in developing three affiliateowned locations in Southern California in 2023.
We have also considered information from existing franchisees of our affiliate Chatime USA LLC, regarding local market conditions, seasonal preferences, etc.
Source: Item 7 — Estimated Initial Investment (FDD pages 17–22)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the 'Additional Funds Three Months' estimate covers business expenses, not personal ones, during the initial three months of operation. This estimate includes costs like payroll, utilities, taxes, and other operating expenses incurred during the first month. However, it specifically excludes the owner's salary or draws, as well as any non-Chatime store management expenses.
This means that prospective Chatime franchisees need to budget separately for their personal living expenses and any costs associated with managing other businesses they may own. The FDD emphasizes that actual costs may be higher than the estimate, and cash flow from the Chatime store may not be sufficient to cover all operating costs during the initial phase. Factors influencing these costs include adherence to Chatime's recommended procedures, management skills, local economic conditions, market demand, competition, local cost factors, and the store's sales levels.
Chatime based this estimate on their experience with three affiliate-owned locations in Southern California in 2023 and information from existing franchisees of their affiliate Chatime USA LLC. However, the FDD provides no guarantee that the specified amounts will be adequate or that additional investment will not be necessary. Therefore, franchisees should carefully consider these exclusions and potential variations when planning their initial investment and operating budget.