Who administers the advertising fund for Chatime?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
on of the country. (Clause 7.3 of the Franchise Agreement).
We will administer the fund. The financial statements of the fund will not be audited and will be made available to you for your review, at your written request, within six months after the end of our fiscal year. Other than reimbursement for reasonable costs and overhead incurred in activities for the administration or direction of the fund, neither we nor any affiliate will receive any payment for providing services or products to the fund. If we spend more than the contributions accumulated in the fund during any fiscal year, we may receive, on demand, reimbursement in later years to the extent of the excess expenditure. We will not be required to spend any amount from the fund on advertising or promotions in your area. Any local, regional or national advertising efforts may not equitably reach all markets. If any contributions to the fund, including any associated earnings, are not spent in the fiscal year in which they accrue, they will remain in the fund for use in following years. We may terminate the fund at any time, but we will not do so until all monies in the fund have been spent for the purposes described in the franchise agreement or returned to contributors on a prorated basis. (Clause 7.3 of the Franchise Agreement). As of December 31, 2024, we had not yet collected or received any advertising funds from any franchisees.
There is no advertising council comprised of franchisees that advises us on advertising policies. We are not required to spend any amount on advertising in your Territory or geographic area. (Clause 7.3 of the Franchise Agreement).
If you request any additional marketing assistance from us, you will pay us any additional fees we charge for such additional marketing assistance including but not limited to media and any additional personnel related costs. You will not use any marketing or promotional material unless that marketing or promotional material has our previous written approval. (Clause 7.3 of the Franchise Agreement).
TRAINING
The Initial Training Program includes, without limitation: (i) sales and Chatime Store operations management, (ii) staff training and scheduling, (iii) local area marketing, (iv) Chatime Store management, (v) raw material inventory and controls, and (vi) basic Chatime Store maintenance. We may offer special training courses such as service competency staff training, promotional training, other pre-opening support, and continuous organizational support in our discretion. (Clause 3.1 of the Franchise Agreement).
Training may be conducted at our headquarters, virtually, at a designated training site in the United States, or at the location of your Chatime Store in our discretion.
INITIAL TRAINING PROGRAM
| Obligation | Article in Franchise | FDD Item |
|---|---|---|
| Agreement (FA) or Multi-Unit Development Agreement (MDA) | ||
| q. Owner’s participation/ | FA: Articles 5, 8, and 9 | Items 11 and 15 |
| management/staffing | MDA: Articles 3 and 4 | |
| r. Records and reports | FA: Article 5 MDA: Article 4 | Item 6 |
| s. Inspections and audits | FA: Article 5 MDA: Article 4 | Items 6 and 11 |
| t. Transfer | FA: Articles 12 and 13 MDA: Articles 10 and 11 | Item 17 |
| u. Renewal | FA: Articles 2 and 6 MDA: Article 2 | Item 17 |
| v. Post-termination obligations | FA: Article 17 MDA: Articles 6, 7 and 15 | Item 17 |
| w. Non-competition covenants | FA: Article 9 MDA: Articles 7 and 15 | Item 17 |
| x. Dispute resolution | FA: Article 16 MDA: Article 14 | Item 17 |
| y. |
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 27–35)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisor will administer the Brand Marketing Fund. This fund is supported by franchisee contributions, set at 2% of gross sales, which are paid to Chatime on the tenth day of each month. The funds are designated for advertising, marketing, and promotional efforts, as well as the associated administrative expenses for managing the fund.
Chatime, or its advertising/public relations/promotional agencies, will prepare all marketing materials. The fund may cover the costs of researching, preparing, maintaining, administering, and directing advertising and promotional materials and programs as Chatime decides. However, the fund will not be used to cover the costs of soliciting prospective franchisees. It can be used to pay for personnel who manage the advertising and promotional programs, as well as reasonable administrative costs and overhead related to the fund. Company-owned and affiliate-owned locations, if any, will contribute to this fund at the same rate as franchisees.
It's important to note that there is no guarantee that any portion of a franchisee's Brand Marketing Fee or the Brand Marketing Fund will be allocated or spent for advertising in their specific territory or region. Chatime will make the financial statements of the fund available to franchisees for review, upon written request, within six months after the end of their fiscal year. These statements will not be audited. Chatime or its affiliates will not receive payment for providing services or products to the fund, other than reimbursement for reasonable costs and overhead incurred in administering the fund.