Where in the Chatime FDD can I find information about the brand's marketing strategies?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: Receipts]
Franchisee must pay the Brand Marketing Fee to Franchisor on the tenth day of each Month. The Brand Marketing Fee will be determined based on the Gross Sales of the Outlet for the previous Month.
7.3 Use of the Brand Marketing Fee
- (1) Franchisor may, in its sole discretion, use the Brand Marketing Fee to pay the Costs of:
- (a) Developing and conducting local, regional or national advertising and promotional campaigns, including advertising in international or regional publications;
- (b) Engaging advertising agencies and marketing and research consultants;
- (c) Providing Franchisee with samples of brochures and marketing materials used by Franchisor or its Affiliates, for amendment and use, subject to clause 7.3(4), by Franchisee in the Territory;
- (d) Coordinating and administering the activities set out in clauses 7.3(1)(a) to 7.3(1)(c), including reasonable overhead and administrative Costs (including employee costs), the Cost of materials and printing Costs; and
- (e) Any other marketing activity for the purpose of developing the Chatime brand internationally, regionally, or in the Territory.
- (2) In applying the Brand Marketing Fee for the purposes set out above, Franchisor may combine the Brand Marketing Fee with other brand marketing fees provided by other franchisees. There is no assurance that any portion of your Brand Marketing Fee or the Brand Marketing Fund will be allocated or spent for advertising in your Territory or region of the country. The monies paid to the Brand Marketing Fund do not constitute a trust fund.
- (3) If Franchisee requests any additional marketing assistance from Franchisor that, in the opinion of Franchisor, is not within the scope of assistance provided for by the Brand Marketing Fee, then Franchisee must pay to Franchisor upon invoice by Franchisor any additional fees and charges levied by Franchisor for such additional marketing assistance.
- (4) Franchisee must not use any marketing or promotional materials unless that marketing or promotional material has been first approved in writing by Franchisor.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime FDD, information regarding the brand's marketing strategies can be found in multiple sections, particularly those defining key terms and outlining the franchisee's obligations and the franchisor's rights related to marketing. The definition of "Business System" includes the distinctive image portrayed in advertising, marketing, and promotions, as well as the brand names, logos, and slogans associated with Chatime. This highlights the importance of marketing as an integral part of the Chatime business model.
Item 23 discusses the Brand Marketing Fee, which franchisees are required to pay. This fee is used at Chatime's discretion for various marketing activities, including developing advertising campaigns, engaging marketing agencies, providing franchisees with marketing materials, and general brand development. It is important to note that Chatime may combine these fees with those of other franchisees and there is no guarantee that the fees will be spent specifically in the franchisee's territory. Additionally, franchisees must obtain written approval from Chatime for all marketing and promotional materials they intend to use.
The FDD also addresses Chatime's rights to market and sell products and services through various channels, including online and at different locations, which may impact a franchisee's territory. This indicates that Chatime retains significant control over marketing strategies and channels, even outside the franchisee's specific area. Understanding these rights and obligations is crucial for prospective franchisees to assess the level of marketing support they can expect and the limitations they may face in their marketing efforts.