What is the relationship between the initial franchise fee for Chatime (Item 5) and the potential for multi-unit development agreements, considering the specific requirements and expectations for franchisees who pursue such 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 standard initial franchise fee for a single unit is $54,900. However, Chatime also offers multi-unit development agreements, which require franchisees to open and operate a pre-determined number of stores within a specific geographic area, according to an agreed-upon schedule.
For franchisees pursuing 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 the franchisee commits to opening. For example, the fee is $98,900 for two locations, $134,900 for three locations, and $274,900 for ten locations. For more than three locations, the fee is $134,900 plus $20,000 for each additional location.
The multi-unit development fee serves as a full credit against the initial franchise fees for each individual location, including the first one. This means that franchisees entering into a multi-unit agreement are not required to pay the standard $54,900 initial franchise fee for each store separately. However, the multi-unit development fee is non-refundable, regardless of how many units the franchisee ultimately opens. 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 ($134,900 to $274,900) and the estimated initial investment to open the initial Chatime store ($238,200 to $425,000).