What does the estimated initial investment in Item 7 assume regarding the operation of a Chatime store?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
The figures below assume the opening of one Chatime Store by you under a Franchise Agreement and operation of the Chatime Store for an initial phase of three months, unless otherwise indicated:
- (11) Additional Funds Three Months.
This is an estimate of the funds needed for business (not personal) expenses during the first three months of operation of your Chatime Store and includes the estimated costs of sales and operating expenses incurred during the initial month of operation (such as payroll, utilities, taxes and, other expenses).
This estimate excludes owners' salaries or draws and non-Chatime Store management expenses.
Your actual costs may be higher.
Cash flow from your operations may not be adequate to cover operating and other costs during the initial phase of business.
Your costs will depend on factors such as how well you follow our recommended method and procedures, your management, marketing, and general business skills, local economic conditions, the local market for your products and services, competition, local cost factors, and your Chatime Store's sales levels.
There is no guarantee that the amounts specified are adequate or that additional investment by you will not be necessary during the first three months of initial operation or afterwards.
We have relied on our experience in developing three affiliateowned locations in Southern California in 2023.
We have also considered information from existing franchisees of our affiliate Chatime USA LLC, regarding local market conditions, seasonal preferences, etc.
Source: Item 7 — Estimated Initial Investment (FDD pages 17–22)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the estimated initial investment figures assume the opening of one Chatime store under a Franchise Agreement. These figures also assume the operation of the Chatime store for an initial phase of three months.
Specifically, the "Additional Funds Three Months" estimate, which ranges from $12,000 to $24,000, covers business expenses—excluding personal expenses like the owner's salary—during the first three months of operation. These expenses include the costs of sales and other operating expenses incurred during the initial month, such as payroll, utilities, and taxes.
Chatime notes that actual costs may be higher, depending on factors like adherence to recommended procedures, management skills, local economic conditions, market demand, competition, local cost factors, and the store's sales levels. The document emphasizes that there is no guarantee the specified amounts will be adequate and that additional investment may be necessary during or after the initial three-month period. Chatime based these estimates on their experience developing three affiliate-owned locations in Southern California in 2023 and information from existing franchisees of their affiliate Chatime USA LLC.