Does Chatime charge interest on funds advanced to or received from the Member?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ified as noncurrent liabilities. There were no amounts due to affiliates at December 31, 2023.
Due to/from member
In the ordinary course of business, the Company periodically advances funds to and receives funds from the Member of the Company. No interest is charged on these advances. Advances to and from the Member are noninterest bearing and have no specific date for repayment. The balance due from Member amounted to $20,108 and $300,000 at December 31, 2024 and 2023, respectively. Management expects these balances to be settled within the next year. The balance due to Member amounted to $60,015 and $- at De
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime Franchise LLC does not charge interest on funds advanced to or received from its Member, Chatime Global LLC. These advances are considered noninterest-bearing and do not have a specific repayment date. As of December 31, 2024, the balance due from the Member was $20,108, while the balance due to the Member was $60,015. Management anticipates that the balance due from the Member will be settled within the next year, but the balance due to the Member is not expected to be settled within the same timeframe.
This arrangement is disclosed as a related-party transaction, which is a common practice where a company like Chatime has close relationships with its parent company or other affiliated entities. These transactions require transparency to ensure they are conducted fairly and do not disadvantage the franchisees or the company itself. The FDD provides this transparency by disclosing the amounts involved and the terms of the advances.
For a prospective Chatime franchisee, this information is relevant because it provides insight into the financial relationships between Chatime and its Member. While these transactions do not directly involve franchisees, they can impact the overall financial health and stability of Chatime, which in turn could affect the support and services provided to franchisees. Understanding these relationships helps franchisees assess the financial management practices of the franchisor.
It is important for potential franchisees to review the complete financial statements and related disclosures in the FDD to gain a comprehensive understanding of Chatime's financial condition and its dealings with related parties. Further inquiry with Chatime about the nature and purpose of these advances, as well as their potential impact on the franchise system, may also be beneficial.