What is the relationship between the initial franchise fee for Chatime (Item 5) and the potential for multi-unit development agreements?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
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Franchise Fees
You will pay us a nonrefundable "Initial Franchise Fee" of $54,900 when you sign the Franchise Agreement. If you give us notice of termination within seven days after execution of your Franchise Agreement, we will return the Initial Franchise Fee within 14 days after receiving your 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
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the initial franchise fee and multi-unit development agreements are related in that the multi-unit development fee serves as a credit against the initial franchise fees. The initial franchise fee for a single Chatime unit is $54,900. Chatime offers multi-unit development agreements where franchisees commit to opening a certain number of stores within a specific area, following an agreed schedule.
For those entering a multi-unit development agreement with Chatime, a non-refundable multi-unit development fee is required upon signing the agreement. This fee varies depending on the number of locations to be developed. For example, developing two Chatime locations requires a fee of $98,900, while three locations require $134,900. For agreements covering more than three locations, the fee is $134,900 plus an additional $20,000 for each location beyond the initial three. A ten-location agreement would incur a fee of $274,900.
The multi-unit development fee covers the initial franchise fees for each individual location, meaning franchisees do not have to pay the standard $54,900 initial franchise fee when signing the individual franchise agreements for each store. However, the multi-unit development fee is non-refundable, regardless of how many units the franchisee ultimately opens. This arrangement incentivizes multi-unit development while providing Chatime with guaranteed revenue upfront. The estimated initial investment for a multi-unit development agreement for three to ten locations ranges from $373,100 to $699,900, which includes the multi-unit development fee and the estimated initial investment to open the initial Chatime store.