When is the Multi-Unit Development Fee considered fully earned by Chatime?

According to Chatime's 2025 Franchise Disclosure Document, the Multi-Unit Development Fee is considered fully earned by Chatime upon receipt. This fee is non-refundable under any circumstances, regardless of the number of units the franchisee ultimately opens. This means that once Chatime receives the Multi-Unit Development Fee, it is considered earned income and will not be returned to the franchisee, even if the franchisee does not open all of the agreed-upon Chatime stores.

The Multi-Unit Development Fee varies depending on the number of Chatime locations the franchisee commits to opening. For two locations, the fee is $98,900. For three locations, the fee is $134,900. For more than three locations, the fee is $134,900 plus $20,000 for each additional location. For ten locations, the fee totals $274,900. This fee structure incentivizes franchisees to commit to opening multiple locations, as it provides a credit against the initial franchise fees for each location.

Prospective franchisees should carefully consider their ability to open the agreed-upon number of Chatime stores before entering into a multi-unit development agreement. Since the Multi-Unit Development Fee is non-refundable, franchisees who fail to meet their development obligations risk losing a significant amount of money. It is crucial to conduct thorough market research and develop a comprehensive business plan to ensure the feasibility of opening multiple locations within the agreed-upon timeframe. Franchisees should also seek legal and financial advice before signing any agreements to fully understand the terms and conditions of the multi-unit development program.