When is the Development Fee for a Chatime Multi-Unit Development Agreement due?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer must pay the Development Fee to Franchisor in accordance with the payment schedule set out in Section 6 of Schedule 1. You must pay Development Fee in one lump sum when you sign this Multi-Unit Development Agreement. The Development Fee replaces, and serves as a full credit against, the Initial Franchise Fee for each Outlet you agree to open (including but not limited to your first Outlet). The Development fee is fully earned by us upon our receipt, and it is not refundable any circumstances, regardless of how many Outlets you actually open.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the Development Fee is due in one lump sum when you sign the Multi-Unit Development Agreement. This fee serves as a full credit against the Initial Franchise Fee for each Chatime outlet you agree to open under the agreement. Chatime considers the Development Fee fully earned upon receipt and specifies that it is non-refundable under any circumstances, regardless of the number of outlets you actually open.
This arrangement is fairly standard in multi-unit development agreements. The non-refundable nature of the fee is a critical point for prospective Chatime developers. It means that if a developer fails to open the agreed-upon number of stores, they will not receive a refund of any portion of the development fee. This underscores the importance of carefully assessing one's capabilities and market conditions before entering into such an agreement with Chatime.
Prospective Chatime franchisees should carefully consider the financial implications and their ability to meet the development schedule outlined in the agreement. Understanding the terms and conditions related to the Development Fee is essential before signing the Multi-Unit Development Agreement.