Is Chatime required to spend any amount from the advertising fund on advertising or promotions in a franchisee's area?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ent in later years to the extent of the excess expenditure. We will not be required to spend any amount from the fund on advertising or promotions in your area. Any local, regional or national advertising efforts may not equitably reach all markets. If any contributions to the fund, including any associated earnings, are not spent in the fiscal year in which they accrue, they will remain in the fund for use in following years. We may terminate the fund at any time, but we will not do so until all monies in the fund have been spent for the purposes described in the franchise agreement or returned to contributors on a prorated basis. (Clause 7.3 of the Franchise Agreement). As of December 31, 2024, we had not yet collected or received any advertising funds from any franchisees.
There is no advertising council comprised of franchisees that advises us on advertising policies. We are not required to spend any amount on advertising in your Territory or geographic area. (Clause 7.3 of the Franchise Agreement).
If you request any additional marketing assistance from us, you will pay us any additional fees we charge for such additional marketing assistance including but not limited to media and any additional personnel related costs. You will not use any marketing or promotional material unless that marketing or promotional material has our previous written approval. (Clause 7.3 of the Franchise Agreement).
TRAINING
The Initial Training Program includes, without limitation: (i) sales and Chatime Store operations management, (ii) staff training and scheduling, (iii) local area marketing, (iv) Chatime Store management, (v) raw material inventory and controls, and (vi) basic Chatime Store maintenance. We may offer special training courses such as service competency staff training, promotional training, other pre-opening support, and continuous organizational support in our discretion. (Clause 3.1 of the Franchise Agreement).
Training may be conducted at our headquarters, virtually, at a designated training site in the United States, or at the location of your Chatime Store in our discretion.
INITIAL TRAINING PROGRAM
| Obligation | Article in Franchise | FDD Item |
|---|---|---|
| Agreement (FA) or Multi-Unit Development Agreement (MDA) | ||
| q. Owner’s participation/ | FA: Articles 5, 8, and 9 | Items 11 and 15 |
| management/staffing | MDA: Articles 3 and 4 | |
| r. Records and reports | FA: Article 5 MDA: Article 4 | Item 6 |
| s. Inspections and audits | FA: Article 5 MDA: Article 4 | Items 6 and 11 |
| t. Transfer | FA: Articles 12 and 13 MDA: Articles 10 and 11 | Item 17 |
| u. Renewal | FA: Articles 2 and 6 MDA: Article 2 | Item 17 |
| v. Post-termination obligations | FA: Article 17 MDA: Articles 6, 7 and 15 | Item 17 |
| w. |
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 27–35)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime is not required to spend any amount from the Brand Marketing Fund on advertising or promotions in a franchisee's specific territory or geographic area. Clause 7.3 of the Franchise Agreement states this explicitly. There is also no assurance that any portion of a franchisee's Brand Marketing Fee will be allocated or spent for advertising in their specific territory or region.
Chatime requires franchisees to contribute to a system-wide advertising and promotional fund called the Brand Marketing Fund. This fee is Two Percent (2 %) of the franchisee's gross sales, payable to Chatime on the tenth day of each month based on the previous month's gross sales. While franchisees contribute to this fund, Chatime has discretion over how the funds are spent. The fund will be used to support advertising, marketing, and promotion efforts that Chatime designates, along with associated administrative expenses.
Chatime may develop and conduct international or regional advertising and promotional campaigns at their discretion. Franchisees are also required to spend at least 2.0% of Gross Sales on local marketing, which is paid to third parties. Franchisees may use their own local advertising materials, provided they follow Chatime's brand guidelines and obtain prior written approval. This local marketing expenditure is separate from the Brand Marketing Fund Fee.