If a Chatime franchisee collects sales taxes, are these included in the Net Sales figure?

According to Chatime's 2025 Franchise Disclosure Document, Net Sales figures do not include sales taxes collected from customers. The FDD specifies that "Net Sales" includes all revenue from the sale of products and services at a Chatime store, including online sales. However, this figure is calculated after deducting customer refunds, staff tips, and sales taxes that are collected from customers and then remitted to the appropriate taxing authorities.

This definition of Net Sales is important for prospective Chatime franchisees because it provides clarity on how the franchisor calculates revenue for the purposes of financial performance representations. By excluding sales taxes, the Net Sales figure gives a more accurate picture of the actual revenue generated by the Chatime store from its core business activities. This allows franchisees to better understand the store's financial performance and make informed decisions about their investment.

For example, the Item 19 of the 2025 FDD includes a table showing Net Sales for several locations in 2024. These figures, such as Location 1 with Net Sales of $793,037, represent the revenue after deducting sales taxes. A potential franchisee can use this information to estimate potential revenue for their own location, keeping in mind that sales taxes will be collected on top of these amounts and then remitted to the government.