Does the definition of 'Cost' include fees payable to lawyers for Chatime?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (14) Cost means any cost charge, expense, outgoing, payment or other expenditure of any nature and where appropriate includes fees and disbursements payable to contractors, consultants, lawyers, and other advisers (including Legal Costs).
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the definition of "Cost" explicitly includes fees payable to lawyers. Specifically, the document defines "Cost" as any expense of any nature, which includes fees and disbursements payable to lawyers. This definition appears in the context of Item 23, which generally discusses receipts and various definitions relevant to the franchise agreement.
For a prospective Chatime franchisee, this means that when the term "Cost" is used within the franchise agreement, it encompasses legal fees. This is particularly relevant when considering expenses that Chatime may allocate from the Brand Marketing Fee. The Brand Marketing Fee can be used to cover various costs, and the inclusion of legal fees in the definition of "Cost" suggests that the Brand Marketing Fee could potentially be used to cover legal expenses incurred by Chatime.
It is important for franchisees to understand the scope of this definition, as it could impact how funds are allocated and used by Chatime. Franchisees should carefully review the sections of the Franchise Agreement that reference "Cost" to fully understand their financial obligations and the franchisor's discretion in using various fees. Understanding this definition can help franchisees better anticipate potential expenses and ensure transparency in financial matters related to the franchise.