Are Chatime's initial franchise fees refundable?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer must pay the Development Fee to Franchisor in accordance with the payment schedule set out in Section 6 of Schedule 1. You must pay Development Fee in one lump sum when you sign this Multi-Unit Development Agreement. The Development Fee replaces, and serves as a full credit against, the Initial Franchise Fee for each Outlet you agree to open (including but not limited to your first Outlet). The Development fee is fully earned by us upon our receipt, and it is not refundable any circumstances, regardless of how many Outlets you actually open.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the initial franchise fee is generally non-refundable. However, the document also discusses a Development Fee for multi-unit developers, which is explicitly stated as non-refundable.
Specifically, for developers entering into a Multi-Unit Development Agreement with Chatime, a Development Fee is required. This fee serves as a credit against the initial franchise fee for each outlet the developer agrees to open. The FDD clearly states that this Development Fee is fully earned by Chatime upon receipt and is not refundable under any circumstances, regardless of the number of outlets the developer actually opens.
This non-refundable policy has significant implications for prospective Chatime developers. It means that if a developer signs a Multi-Unit Development Agreement but fails to open all the agreed-upon outlets, they will not receive a refund for the portion of the Development Fee allocated to those un-opened locations. This policy underscores the importance of carefully assessing one's capacity and commitment before entering into such an agreement with Chatime. It is crucial to conduct thorough due diligence and have a solid business plan to minimize the risk of forfeiting a substantial, non-refundable fee.