What is the deadline to provide notice of termination to receive a refund of the Initial Franchise Fee for a Chatime franchise?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| Estimated Amount | Method of | When | Payable to | ||
|---|---|---|---|---|---|
| Type of Expenditure | |||||
| Range | Payment | Payable | Whom | ||
| Initial Franchise Fee(1) | $54,900 | Lump sum | Upon signing Franchise Agreement | Us | |
| Initial Training, Opening | $5,000 | As arranged | As incurred | Us | |
| Support and | |||||
| Related Personnel Cost(2) | |||||
| Rent(3) | $6,000 to $33,000 | As arranged | As specified in lease | Landlord | |
| Lease Security Deposit (3) | $4,000 to $22,000 | As arranged | As specified in lease | Landlord | |
| Storage Space Deposit(3) | $0 to $1500 | As arranged | As specified in lease | Third party | |
| Leasehold Improvements (4) | $135,000 to $226,000 | As arranged | As incurred | Third party or Us | |
| Equipment (5) | $33,500 to $46000 | As arranged | As incurred | Third party | |
| External Signage | $4,200 to $9,500 | As arranged | As incurred | Third party | |
| Estimated Amount | Method of | When | Payable to | ||
| Type of Expenditure | Range | Payment | Payable | Whom | |
| Opening Inventory and | $10,000 to $16,000 | As arranged | As incurred | Our affiliates | |
| Supplies(6) | |||||
| Grand opening marketing(7) | $10,000 | As arranged | As incurred | Third parties | |
| Licenses, Permits, and | $3,500 to $5,500 | As arranged | Lump sum | Third party | |
| Utility Deposits(8) | |||||
| Technology Systems(9) | $10,500 to $14,000 | As arranged | As incurred | Third party or us | |
| Uniforms | $500 to $1,500 | As arranged | As incurred | Us or third party | |
| Insurance(10) | $3,000 to $6,000 | As arranged | As incurred | Third party | |
| Professional Fees | $1,000 to $5,000 | As arranged | As incurred | Third party | |
| Additional Funds – Three | $12,000 to $24,000 | As arranged | As incurred | Third party | |
| Months(11) | |||||
| Total Estimated Initial | $ 293,100 to $479,900 | ||||
| Investment | # Notes: |
- (1) Initial Franchise Fee and Other Fees. You will pay us a non-refundable $54,900 Initial Franchise Fee. All of the fees paid to us are non-refundable except that, if you give us notice of termination within seven days after execution of your Franchise Agreement, we will return the Initial Franchise Fee within 14 days after receiving your notice of termination. Fees paid to vendors or other suppliers may be refundable
Source: Item 7 — Estimated Initial Investment (FDD pages 17–22)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a prospective franchisee has a limited window to terminate the Franchise Agreement and receive a refund of the initial franchise fee. Specifically, if the franchisee provides written notice of termination to Chatime within seven days of signing the Franchise Agreement, Chatime will refund the initial franchise fee within 14 days of receiving the termination notice. This refund policy provides a short grace period for franchisees to reconsider their investment after signing the agreement. The initial franchise fee is $54,900.
It is important to note that this refund condition applies only to the initial franchise fee paid directly to Chatime. Other fees paid to vendors or suppliers may be refundable, but this depends on the specific policies of those vendors and suppliers, not on Chatime's policy. This means that while the franchisee can get the $54,900 back if they act quickly, other expenses incurred during this period might not be recoverable.
This type of short termination window with a refund is not uncommon in the franchise industry, as it allows both parties to ensure the agreement is a good fit early on. Prospective Chatime franchisees should carefully review the Franchise Agreement and all related documents, and conduct thorough due diligence, before signing. If there are any doubts or concerns, it is crucial to act within that seven-day period to preserve the right to a refund of the initial franchise fee.