Is the Chatime Development Fee refundable, and under what circumstances?
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 not refundable under any circumstances. The Development Fee must be paid in a single lump sum upon signing the Multi-Unit Development Agreement. This fee serves as a credit towards the Initial Franchise Fee for each Chatime outlet the developer agrees to open.
Chatime states that the Development Fee is fully earned upon receipt. This means that once Chatime receives the fee, it is considered fully earned and will not be returned, regardless of the number of outlets the developer actually opens. This policy is a significant consideration for potential multi-unit developers, as it represents a non-refundable investment from the outset.
Prospective developers should carefully evaluate their ability to meet the development quota and open the agreed-upon number of Chatime outlets. The non-refundable nature of the Development Fee means that failing to meet the development schedule could result in a substantial financial loss. It is important to conduct thorough due diligence and assess the market potential in the designated development area before committing to the agreement and paying the Development Fee.