For a Chatime franchise, who is responsible for paying stamp duties and comparable taxes associated with the Franchise Agreement or any Collateral Agreement?

According to Chatime's 2025 Franchise Disclosure Document, the franchisee is responsible for paying all stamp duties and comparable duties and taxes, including any penalties for late payment, that are assessed on or related to the Franchise Agreement or any Collateral Agreement. This means that in addition to the initial franchise fee and ongoing royalty payments, a new Chatime franchisee must also budget for these potential tax liabilities. These costs can vary depending on the location of the franchise and the specific terms of the agreements.

Stamp duties and comparable taxes are fees imposed by governmental authorities on legal documents. These taxes are triggered when the Franchise Agreement or any related Collateral Agreements are executed. Collateral Agreements are other agreements related to the franchise, such as lease agreements or financing agreements. The franchisee is responsible for paying these taxes, which can add to the initial investment required to start the business.

It is important for prospective Chatime franchisees to understand this obligation and factor it into their financial planning. Failure to pay these taxes can result in penalties for late payment, as the franchisee is responsible for these. Franchisees should consult with a tax advisor to determine the specific stamp duties and comparable taxes applicable to their franchise and ensure timely payment to avoid penalties.