May Chatime receive promotional allowances, volume discounts, commissions, rebates, and other payments from suppliers and vendors?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
rvices or your use of particular suppliers.
We and our affiliates will derive revenue from your purchase of products, supplies, signs, uniforms, and other products and services that we or our affiliates provide to you. In addition, we may receive promotional allowances, volume discounts, commissions, rebates, and other payment from suppliers, vendors, accounting services, and insurance providers. Our affiliates negotiate purchase arrangements with suppliers or vendors for the benefit of the System, which often include volume discounts. Some suppliers, vendors, accounting services, or insurance providers will pay fees to us and/or our affiliates for products or services purchased through these negotiated agreements, and willingness to pay us and/or our affiliates fees may be a condition for approving a supplier, vendor, accounting services, or insurance provider. We and our affiliates may use all amounts received from suppliers or vendors, whether or not based on you and other franchisees' prospective or actual dealings with them, without restriction for any purposes that we and our affiliates deem appropriate. The commissions, rebates, or fees which we may receive from your purchase of products or services from suppliers, vendors, payroll service, real estate and project management services, and accounting services, or insurance providers, may cause the price for such products or services to be higher than market value.
You are required to purchase or lease all of your products, ingredients, goods, supplies, equipment, inventory, insurance, payroll service, real estate and project management services, and accounting services, from us or one of our approved suppliers which may be one of our affiliates.
Our affiliates La Kaffa and Chatime Wholesale LLC are currently the only approved suppliers for certain products and supplies such as ingredients, supplies, and equipment. Officers of the franchisor own an indirect ownership interest in La Kaffa and Chatime Wholesale LLC.
Except for La Kaffa and Chatime Wholesale LLC, there are no approved suppliers in which any of our officers own an interest.
We estimate that your required purchases from approved suppliers will represent approximately 85% of the total purchases for establishing and operating your Chatime Store. We did not have any revenue in 2024 from required purchases and leases of products and services by franchisees. Our affiliates had revenue of $396,652.37 from required purchases and leases of p
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–25)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime and its affiliates may receive revenue from a franchisee's purchase of products, supplies, signs, uniforms, and other products and services. Chatime may also receive promotional allowances, volume discounts, commissions, rebates, and other payments from suppliers, vendors, accounting services, and insurance providers. These arrangements often include volume discounts negotiated by Chatime's affiliates for the benefit of the entire Chatime system. Some suppliers, vendors, accounting services, or insurance providers will pay fees to Chatime and/or its affiliates for products or services purchased through these negotiated agreements, and willingness to pay these fees may be a condition for the supplier's approval.
Chatime and its affiliates can use the amounts received from suppliers or vendors without restriction for any purposes they deem appropriate. The commissions, rebates, or fees that Chatime may receive from a franchisee's purchases could potentially cause the price for those products or services to be higher than market value.
As a Chatime franchisee, you are required to purchase or lease all products, ingredients, goods, supplies, equipment, inventory, insurance, payroll service, real estate and project management services, and accounting services from Chatime or its approved suppliers, which may include Chatime's affiliates. In 2024, Chatime's affiliates had revenue of $396,652.37 from required purchases and leases of products and services by franchisees. Chatime estimates that a franchisee's required purchases from approved suppliers will represent approximately 85% of the total purchases for establishing and operating a Chatime store.