What expenses are included in the Temporary Management Fee charged by Chatime?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fee(1) Type of | Amount | Due Date | Remarks |
|---|---|---|---|
| Temporary Management Fee | Commercially reasonable fee not less than $30 per hour plus costs of travelling, accommodation, meals, and other expenses for operating and managing the Store | As invoiced | If you cease to conduct operations or abandon your franchise business, we or our nominee may, but are not required to, enter your business premises and operate and manage your franchise business until you comply with our direction or notice requiring you to recommence operations. You will pay us a reasonable Temporary Management Fee we determine and our associated expenses including, without limitation, costs for employee wages and entitlements, travel, accommodations, and meals. |
Source: Item 6 — Other Fees (FDD pages 13–17)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the Temporary Management Fee includes a commercially reasonable fee of no less than $30 per hour, plus the costs of travel, accommodation, meals, and other expenses for operating and managing the store. This fee is charged if the franchisee ceases operations or abandons the franchise, allowing Chatime to step in and manage the business.
In addition to the hourly fee and direct costs, the Temporary Management Fee also covers associated expenses such as employee wages and entitlements. This means that Chatime can recoup all costs associated with bringing in a management team to keep the store running. The fee is invoiced to the franchisee, who is responsible for prompt payment.
This provision protects Chatime by ensuring they can recover expenses incurred if they must temporarily take over a non-performing or abandoned store. For a franchisee, this highlights the importance of maintaining continuous operation and adhering to the franchise agreement to avoid triggering this fee. It also underscores the potential financial burden if the franchisee is unable to manage the business effectively, leading to a situation where Chatime needs to intervene.