What is the purpose of Chatime's marketing and promotional fund?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must pay the Brand Marketing Fee to Franchisor on the tenth day of each Month. The Brand Marketing Fee will be determined based on the Gross Sales of the Outlet for the previous Month.
7.3 Use of the Brand Marketing Fee
- (1) Franchisor may, in its sole discretion, use the Brand Marketing Fee to pay the Costs of:
- (a) Developing and conducting local, regional or national advertising and promotional campaigns, including advertising in international or regional publications;
- (b) Engaging advertising agencies and marketing and research consultants;
- (c) Providing Franchisee with samples of brochures and marketing materials used by Franchisor or its Affiliates, for amendment and use, subject to clause 7.3(4), by Franchisee in the Territory;
- (d) Coordinating and administering the activities set out in clauses 7.3(1)(a) to 7.3(1)(c), including reasonable overhead and administrative Costs (including employee costs), the Cost of materials and printing Costs; and
- (e) Any other marketing activity for the purpose of developing the Chatime brand internationally, regionally, or in the Territory.
- (2) In applying the Brand Marketing Fee for the purposes set out above, Franchisor may combine the Brand Marketing Fee with other brand marketing fees provided by other franchisees. There is no assurance that any portion of your Brand Marketing Fee or the Brand Marketing Fund will be allocated or spent for advertising in your Territory or region of the country. The monies paid to the Brand Marketing Fund do not constitute a trust fund.
- (3) If Franchisee requests any additional marketing assistance from Franchisor that, in the opinion of Franchisor, is not within the scope of assistance provided for by the Brand Marketing Fee, then Franchisee must pay to Franchisor upon invoice by Franchisor any additional fees and charges levied by Franchisor for such additional marketing assistance.
- (4) Franchisee must not use any marketing or promotional materials unless that marketing or promotional material has been first approved in writing by Franchisor.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the Brand Marketing Fee that franchisees pay is used to cover the costs of various marketing and promotional activities. These activities are aimed at developing the Chatime brand both internationally and within the franchisee's specific territory.
The franchisor has the sole discretion to use the Brand Marketing Fee for several purposes. These include developing advertising campaigns at the local, regional, or national level, as well as engaging advertising agencies and marketing consultants. The fund can also be used to provide franchisees with marketing materials, and to coordinate and administer marketing activities. Any other marketing activity aimed at developing the Chatime brand can also be covered by the Brand Marketing Fee.
Chatime may combine the Brand Marketing Fee with fees from other franchisees, and there is no guarantee that a franchisee's contribution will be used specifically for advertising in their territory or region. The marketing fund is not a trust fund. If a franchisee requires additional marketing assistance beyond what the Brand Marketing Fee covers, they will be responsible for paying additional fees to Chatime. All marketing and promotional materials used by the franchisee must be approved in writing by Chatime.