For Chatime, what is the definition of 'Impost' in the context of taxes and charges that may be levied?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
24.1 Taxes and Charges
If any laws are changed or new laws are introduced or courts or any relevant authority interpret laws differently which results in Franchisor having to pay a tax, duty, excise, or levy (Impost) on amounts received from Franchisee under this Agreement (other than income tax) or on goods or services supplied by Franchisor under this Agreement, Franchisee must pay to Franchisor an additional amount so that after Franchisor has paid the Impost its yield under this Agreement is unchanged.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, an "Impost" refers to a tax, duty, excise, or levy that Chatime, as the Franchisor, might have to pay on the amounts it receives from the Franchisee under the Franchise Agreement. This excludes income tax.
In practical terms, if new laws or changes in existing laws lead to Chatime incurring such an Impost, the franchisee is responsible for paying an additional amount to Chatime. This additional payment ensures that after Chatime pays the Impost, its overall yield or profit from the agreement remains unchanged.
This clause protects Chatime from bearing the burden of unexpected taxes or charges imposed by changes in legislation. It effectively passes the cost of these taxes onto the franchisee, maintaining Chatime's financial position as if the tax had not been introduced. Franchisees should be aware of this provision, as it means their costs could increase if new taxes or levies are introduced that affect the payments they make to Chatime.