How does the multi-unit development fee for Chatime relate to the initial franchise fee for individual locations?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
it Development Agreement chart above:**
- If you sign a multi-unit development agreement, you will pay us, when you sign that agreement, a non-refundable fee for the right to development multiple franchise units. You agree to open and operate the agreed number of Chatime Stores within a specific geographic area according to an agreed development schedule. The amount of the multi-unit development fee will depend on the number of locations to be opened. For each location, you will have to sign a separate individual unit franchise agreement in our then-current form of franchise agreement, which may be different than our current form of franchise agreement. The multi-unit development fee will serve as a full credit against the initial franchise fee for each location (including the first location), so that you will not be required to pay an initial franchise fee at the time you sign each Franchise Agreement for each location.
The Multi-Unit Development fee is as follows: 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. The multi-unit development fee is fully-earned by us upon receipt and is not refundable under any circumstances, regardless of the number of units you open.
This estimate assumes that you will not require separate office space to operate the multi-unit development business. Typically, the multi-unit development business will initially be operated from your home, and then, after you have opened your first Chatime Store, the multi-unit development business will be operated in the office space of one of your Chatime Stores.
The total initial investment for a multi-unit development agreement for three to ten locations is $373,100 to $699,900.
Source: Item 7 — Estimated Initial Investment (FDD pages 17–22)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the multi-unit development fee serves as a credit towards the initial franchise fee for each individual location. When signing a multi-unit development agreement, a franchisee pays a non-refundable fee for the right to develop multiple Chatime stores within a specific area, according to an agreed-upon schedule. The amount of this fee depends on the number of locations to be opened.
For each location under the multi-unit development agreement, the franchisee must sign a separate individual unit franchise agreement. The multi-unit development fee acts as a full credit against the $54,900 initial franchise fee that would normally be required for each location. This means that when the franchisee signs the individual Franchise Agreement for each store, they will not have to pay an additional initial franchise fee.
For example, the multi-unit development fee for two locations is $98,900, and for three locations, it's $134,900. For more than three locations, the fee is $134,900 plus $20,000 for each additional location. It’s important to note that the multi-unit development fee is fully earned by Chatime upon receipt and is non-refundable, regardless of how many units the franchisee ultimately opens. This arrangement can be financially beneficial for franchisees planning to open multiple locations, as it consolidates the initial franchise fees into a single, upfront payment.