What is the minimum hourly rate for the Temporary Management Fee charged by Chatime?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| Uniforms for First | $500 to $1,500 | $500 to $1,500 | $500 to $1,500 |
|---|---|---|---|
| Location | |||
| Initial Training for First | $5,000 | $5,000 | $5,000 |
| Fee(1) Type of | Amount | Due Date | Remarks |
| Audit Fee | Cost of audit | As invoiced | Payable if (i) we find that you have understated any amount you owe to us by more than 2%, or (ii) you fail to furnish reports, supporting records, other information or financial statements as required on a timely basis and we believe an audit is necessary. The Audit Fee includes accountants' fees, legal fees, and associated travel and accommodation expenses for our employees. |
| Interest Rate | The lesser of 1.5% per month or the highest rate allowed by law | As invoiced | If you fail to pay us any amount when due, you will pay interest on that amount at the Interest Rate from the time the amount should have been paid until it is paid. Interest accrues daily and may be capitalized by us. |
| Alternate | Costs incurred | As invoiced | You will reimburse us for our costs to test |
| Supplier Testing | a proposed alternate supplier regardless of | ||
| Fee | whether such supplier is approved. | ||
| Temporary Management Fee | Commercially reasonable fee not less than $30 per hour plus costs of travelling, accommodation, meals, and other expenses for operating and managing the Store | As invoiced | If you cease to conduct operations or abandon your franchise business, we or our nominee may, but are not required to, enter your business premises and operate and manage your franchise business until you comply with our direction or notice requiring you to recommence operations. You will pay us a reasonable Temporary Management Fee we determine and our associated expenses including, without limitation, costs for employee wages and entitlements, tr |
Source: Item 6 — Other Fees (FDD pages 13–17)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the minimum hourly rate for the Temporary Management Fee is $30. This fee is charged if Chatime or its nominee has to step in to operate and manage your franchise because you have ceased operations or abandoned the business. In addition to the hourly fee, you will also be responsible for covering the costs of travelling, accommodation, meals, and other expenses incurred while operating and managing the store.
This means that if you are unable to run your Chatime franchise for any reason, Chatime has the right, but not the obligation, to take over operations. If they do so, you will be responsible for not only the commercially reasonable hourly fee, but also all associated costs. The FDD specifies that the fee will not be less than $30 per hour, but does not specify a maximum amount.
It is important to note that the Temporary Management Fee is in addition to other potential costs, such as employee wages and entitlements. This could represent a significant financial burden on the franchisee, especially if the period of temporary management is extended. Prospective franchisees should consider this potential expense when evaluating the financial viability of a Chatime franchise and inquire with current franchisees about typical durations and total costs of temporary management situations.