What is the deadline for a Chatime franchisee to provide the official receipt from the relevant authority for any deductions or withholdings made?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
6.7 Withholding
- (1) All withholding taxes shall be borne by Franchisee. That is to say, all payments by Franchisee must be made without deduction or withholding (including, without limitation, by way of set-off, counterclaim, duty, tax (including goods and services tax, value added tax, and other government imposts) or charge) unless Franchisee is prohibited by law from doing so, in which case Franchisee must:
- (a) Promptly pay to Franchisor any additional amount necessary to ensure that the net amount received by Franchisor equals the full amount which would have been received by Franchisor if no deduction or withholding had been made;
- (b) Pay to the relevant authority within the period for payment permitted by law the full amount of the deduction or withholding (including the full amount of any deduction or withholding from any additional amount paid under clause 6.7(1)(a));
- (c) Give Franchisor the official receipt from the authority for the amount paid to it within 7 days after Franchisee receives it; and
- (d) Assist Franchisor with any reasonable requests for information or supporting documents regarding the calculation and/or payment of the amount paid.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisee is responsible for all withholding taxes. Payments made by the franchisee to Chatime must be without any deductions or withholdings unless the law prohibits it. If such a prohibition exists, the franchisee must ensure that Chatime receives the full amount that would have been received if no deduction or withholding was made.
In the event that deductions or withholdings are legally required, the Chatime franchisee must pay the full amount of the deduction or withholding to the relevant authority within the period permitted by law. Furthermore, the franchisee is obligated to provide Chatime with the official receipt from the authority for the amount paid within 7 days after the franchisee receives it.
In addition to providing the receipt, the franchisee must assist Chatime with any reasonable requests for information or supporting documents regarding the calculation and/or payment of the amount paid. This ensures transparency and compliance with legal and financial requirements.
This requirement ensures that Chatime receives the correct payments, even when franchisees are legally obligated to make deductions or withholdings for taxes or other charges. The 7-day deadline for providing the official receipt is relatively tight, so franchisees need to have systems in place to ensure they can comply with this requirement.