Is a Chatime franchisee required to follow directions from the franchisor regarding the administration of the Local Marketing Expenditure?

According to the 2025 Chatime Franchise Disclosure Document, franchisees are indeed required to adhere to the franchisor's directives concerning the administration of their Local Marketing Expenditure. This fund is specifically designated for local marketing initiatives for the franchisee's outlet.

The FDD stipulates that franchisees must comply with all reasonable directions given by Chatime regarding the administration of the Local Marketing Expenditure. This includes directions related to the content, style, nature, or production of any advertising, sales promotions, and customer satisfaction surveys. Furthermore, franchisees are obligated to follow Chatime's brand guidelines and secure prior written approval from Chatime for all local advertising and promotional plans and materials, bearing the expense of achieving compliance and obtaining approval.

This requirement ensures that local marketing efforts align with the overall Chatime brand strategy and maintain consistency across all franchise locations. It also allows Chatime to have oversight and control over how marketing funds are being spent at the local level, ensuring that the funds are used effectively and in a manner that benefits the brand as a whole. Franchisees should be aware that failure to comply with these directions could potentially lead to a breach of the franchise agreement.