Does the Brand Marketing Fund for Chatime constitute a trust fund?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) In applying the Brand Marketing Fee for the purposes set out above, Franchisor may combine the Brand Marketing Fee with other brand marketing fees provided by other franchisees. There is no assurance that any portion of your Brand Marketing Fee or the Brand Marketing Fund will be allocated or spent for advertising in your Territory or region of the country. The monies paid to the Brand Marketing Fund do not constitute a trust fund.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the monies paid to the Brand Marketing Fund do not constitute a trust fund. Chatime franchisees are required to pay a Brand Marketing Fee, the amount of which is determined based on the Gross Sales of the Outlet for the previous month. This fee is paid to Chatime on the tenth day of each month.
Chatime has sole discretion over how the Brand Marketing Fee is used. These fees may be pooled with those of other franchisees. The FDD specifies that there is no guarantee that any portion of a franchisee's Brand Marketing Fee will be allocated or spent for advertising in their specific territory or region.
This arrangement is typical in franchising, where marketing funds are controlled by the franchisor for the benefit of the brand as a whole. However, franchisees should be aware that they may not see a direct benefit from their contributions in their specific area. Franchisees should consider this when evaluating the potential return on investment of a Chatime franchise.