What is the Alternate Supplier Testing Fee for Chatime, and when is it due?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fee(1) Type of | Amount | Due Date | Remarks |
|---|---|---|---|
| Alternate | Costs incurred | As invoiced | You will reimburse us for our costs to test |
| Supplier Testing | a proposed alternate supplier regardless of | ||
| Fee | whether such supplier is approved. |
Source: Item 6 — Other Fees (FDD pages 13–17)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if a franchisee proposes an alternate supplier, Chatime will charge a fee to cover the costs incurred to test the proposed supplier. The amount of the Alternate Supplier Testing Fee is not a fixed amount, but rather the costs Chatime incurs. This fee is due as invoiced, regardless of whether Chatime approves the alternate supplier.
This means that a Chatime franchisee looking to use a different supplier for any products or services must first have that supplier approved by Chatime. The franchisee will be responsible for covering the expenses Chatime incurs during the testing and approval process. This could include lab tests, inspections, or other evaluations to ensure the alternate supplier meets Chatime's standards.
The fact that the fee is not a fixed amount and is instead based on costs incurred introduces some uncertainty for the franchisee. The franchisee won't know the exact amount of the fee in advance, making it difficult to budget. It would be prudent for a prospective Chatime franchisee to discuss with Chatime what typical costs have been for alternate supplier testing to better understand the potential financial impact.
Franchisors commonly retain the right to approve suppliers to maintain quality control and brand consistency. However, the financial burden of testing new suppliers is not always borne by the franchisee, so this is an important consideration for anyone evaluating a Chatime franchise.