Does the Chatime 'Net Sales' definition include online sales fulfilled from the Chatime location?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Net Sales means all revenue from the sale of all products and sources, derived from, or originating from the relevant Chatime store. This includes online sales fulfilled from the location. Net sales
includes transactions, whether for cash, check, or credit, and regardless of collection in the case of check or credit, less any customer refunds, staff tips and/or sales taxes collected from customers and actually transmitted to the appropriate taxing authorities.
Net Sales information included in this Item 19 and the table below is obtained from store point-ofsale (POS) reports and other materials submitted by the retail locations and franchisee. Neither we, any of our affiliates nor an independent certified public accountant has independently audited or verified the information.
Source: Item 19 — Financial Performance Representations (FDD pages 52–53)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the definition of Net Sales includes online sales fulfilled from the physical Chatime store location. Net Sales encompasses all revenue derived from any source originating from the Chatime store. This includes transactions made via cash, check, or credit, regardless of whether the payment has been fully collected, but it excludes customer refunds, staff tips, and sales taxes that are collected from customers and remitted to the appropriate taxing authorities.
This definition is important for prospective franchisees because it clarifies what revenue is included when Chatime presents financial performance representations. By including online sales in the Net Sales figure, Chatime provides a more comprehensive view of a store's potential revenue. Franchisees can use this information to better understand the potential financial performance of a Chatime location, especially in an era where online ordering and delivery services are increasingly prevalent.
Chatime obtains Net Sales information from store point-of-sale (POS) reports and other materials submitted by franchisees. However, the FDD states that neither Chatime, its affiliates, nor an independent certified public accountant has independently audited or verified this information. This means that the accuracy of the Net Sales figures depends on the accuracy of the reports submitted by the franchisees. Prospective franchisees should be aware of this limitation and consider it when evaluating the financial performance representations provided by Chatime.