What is the 'Local Marketing Expenditure' for a Chatime outlet, as defined in the FDD?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: Receipts]
7 Marketing
7.1 Local Marketing Expenditure
- (1) Franchisee must:
- (a) Establish, maintain and administer a Franchisee-funded marketing fund to be spent for local marketing, which will be known as the Local Marketing Expenditure for the Outlet;
- (b) Direct the creation and implementation of advertising, marketing, and promotional programs for the Territory;
- (c) Adapt the marketing materials provided to Franchisee by Franchisor for use in the Territory;
- (d) Keep full details and records of all Local Marketing Expenditure receipts and expenditure on a monthly basis;
- (e) Allow Franchisor full and free access at all reasonable times to all details of the Local Marketing Expenditure and records;
- (f) Comply with all reasonable directions given by Franchisor from time to time in relation to the administration of the Local Marketing Expenditure and in relation to
the content, style, nature or manufacture of any advertising, sales promotion and customer satisfaction surveys;
- (g) Comply with Franchisor's brand guidelines and obtain the prior written approval of Franchisor for all of its local advertising and promotional plans and all materials it would like to use. Achieving compliance and obtaining such approval shall be at the expense of Franchisee;
- (h) At all times ensure that all marketing, promotion, and advertising complies with all applicable laws; and
- (i) Follow Franchisor's policy on marketing funds as specified in the Operations Manual or the Global Policies and Procedures as amended from time to time. The provisions of such policies and procedures will override this clause to the extent of any inconsistency.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the Local Marketing Expenditure is defined as a franchisee-funded marketing fund. Franchisees are required to establish, maintain, and administer this fund, which is specifically designated for local marketing initiatives for their Chatime outlet.
The FDD outlines several responsibilities for franchisees regarding the Local Marketing Expenditure. These include directing the creation and implementation of advertising, marketing, and promotional programs for their designated territory, as well as adapting marketing materials provided by Chatime for local use. Franchisees must also maintain detailed records of all Local Marketing Expenditure receipts and spending on a monthly basis, and provide Chatime with full access to these records at any reasonable time.
Furthermore, franchisees must comply with any reasonable directions given by Chatime regarding the administration of the Local Marketing Expenditure, including the content, style, nature, or production of any advertising, sales promotions, and customer satisfaction surveys. Franchisees are also required to adhere to Chatime's brand guidelines and obtain prior written approval from Chatime for all local advertising and promotional plans and materials, bearing the expense of achieving compliance and securing approval. This ensures that all marketing efforts align with the overall Chatime brand strategy and standards.
Finally, the FDD states that franchisees must follow Chatime's policy on marketing funds as specified in the Operations Manual or the Global Policies and Procedures, as amended from time to time. In the event of any inconsistency, the provisions of such policies and procedures will take precedence over the clause defining Local Marketing Expenditure. The FDD does not specify a particular amount or percentage that must be allocated to the Local Marketing Expenditure.