Does the Multi-Unit Development Fee for Chatime serve as a credit, and if so, against what?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
notice of termination.
We also offer multi-unit development agreements under which you agree to open and operate an agreed number of Chatime Stores within a specific geographic area according to an agreed development schedule. If you enter into a multi-unit development agreement, you will pay us a non-refundable multi-unit development fee at the time of signing the multi-unit development agreement. 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 ("Multi-Unit Development Fee") will serve as a full credit against the initial franchise fees 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. For ten locations, the fee is $274,900. The multi-unit development fee is fully-earned by us upon receipt and is not refundable under any circumstances, regardless of the n
Source: Item 5 — Initial Fees (FDD pages 11–13)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the Multi-Unit Development Fee serves as a credit against the initial franchise fees. Specifically, if a franchisee enters into a multi-unit development agreement, they will pay a non-refundable Multi-Unit Development Fee at the time of signing the agreement. The amount of this fee depends on the number of Chatime locations to be opened.
This Multi-Unit Development Fee acts as a full credit towards the initial franchise fees for each location, including the first one. This means that franchisees entering a multi-unit agreement will not be required to pay a separate Initial Franchise Fee of $54,900 (as shown in the table for a single unit franchise) when they sign the individual Franchise Agreement for each location. For example, the Multi-Unit Development Fee for two locations is $98,900, for three locations it is $134,900, and for ten locations, it totals $274,900.
It is important to note that the Multi-Unit Development Fee is fully earned by Chatime upon receipt and is non-refundable under any circumstances, regardless of how many units the franchisee ultimately opens. This arrangement is common in franchising as it incentivizes multi-unit development while providing the franchisor with upfront capital. However, prospective franchisees should carefully consider their ability to meet the development schedule before entering into such an agreement, given the non-refundable nature of the fee.