How are Chatime's marketing and promotional fund fees collected from franchisees?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must pay the Brand Marketing Fee to Franchisor on the tenth day of each Month. The Brand Marketing Fee will be determined based on the Gross Sales of the Outlet for the previous Month.
7.3 Use of the Brand Marketing Fee
- (1) Franchisor may, in its sole discretion, use the Brand Marketing Fee to pay the Costs of:
- (a) Developing and conducting local, regional or national advertising and promotional campaigns, including advertising in international or regional publications;
- (b) Engaging advertising agencies and marketing and research consultants;
- (c) Providing Franchisee with samples of brochures and marketing materials used by Franchisor or its Affiliates, for amendment and use, subject to clause 7.3(4), by Franchisee in the Territory;
- (d) Coordinating and administering the activities set out in clauses 7.3(1)(a) to 7.3(1)(c), including reasonable overhead and administrative Costs (including employee costs), the Cost of materials and printing Costs; and
- (e) Any other marketing activity for the purpose of developing the Chatime brand internationally, regionally, or in the Territory.
- (2) In applying the Brand Marketing Fee for the purposes set out above, Franchisor may combine the Brand Marketing Fee with other brand marketing fees provided by other franchisees. There is no assurance that any portion of your Brand Marketing Fee or the Brand Marketing Fund will be allocated or spent for advertising in your Territory or region of the country. The monies paid to the Brand Marketing Fund do not constitute a trust fund.
- (3) If Franchisee requests any additional marketing assistance from Franchisor that, in the opinion of Franchisor, is not within the scope of assistance provided for by the Brand Marketing Fee, then Franchisee must pay to Franchisor upon invoice by Franchisor any additional fees and charges levied by Franchisor for such additional marketing assistance.
- (4) Franchisee must not use any marketing or promotional materials unless that marketing or promotional material has been first approved in writing by Franchisor.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to pay a Brand Marketing Fee to Chatime by the tenth day of each month. This fee is calculated based on the gross sales of the franchisee's outlet from the previous month.
Chatime has the sole discretion over how the Brand Marketing Fee is used. These funds can cover the costs of developing advertising campaigns at the local, regional, or national level, as well as engaging advertising agencies and marketing consultants. Chatime may also use the fees to provide franchisees with marketing materials, coordinate marketing activities, and cover overhead and administrative costs related to these efforts. The Brand Marketing Fee can also be used for any other marketing activity that aims to develop the Chatime brand internationally, regionally, or within the franchisee's specific territory.
Chatime may combine the Brand Marketing Fees collected from multiple franchisees. It is important to note that there is no guarantee that a franchisee's contribution to the Brand Marketing Fund will be specifically allocated or spent on advertising within their territory or region. The funds are not held in a trust. If a franchisee requires additional marketing assistance beyond what is covered by the Brand Marketing Fee, they will be responsible for paying additional fees and charges to Chatime upon invoicing. All marketing and promotional materials used by the franchisee must receive prior written approval from Chatime.