When is the royalty fee due for a Chatime franchise?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fee(1) Type of | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 5.0% of Gross Sales | Tenth day of the month calculated based on the Gross Sales of the previous month | "Gross Sales" means the total actual gross charges for all products, merchandise, and services sold to your Store's customers for cash or credit, whether such sales are made at or from the premises of your Store or any other location or other channels of distribution if approved in writing in advance by us and including proceeds from any business interruption or similar insurance coverage, but excluding (i) sales, use, service, or excise taxes collected from customers and paid to the appropriate taxing authority and (ii) all customer refunds, adjustments and promotional discountsincluding any senior citizens discount. |
Source: Item 6 — Other Fees (FDD pages 13–17)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the royalty fee is due on the tenth day of each month. This fee is calculated as 5.0% of the Gross Sales from the previous month. Gross Sales includes the total charges for all products, merchandise, and services sold to customers, whether the sales are made at the store or through other approved channels. It also includes proceeds from business interruption insurance.
However, Gross Sales excludes sales, use, service, or excise taxes collected from customers and paid to the appropriate taxing authority. Additionally, customer refunds, adjustments, and promotional discounts, including senior citizen discounts, are also excluded from Gross Sales when calculating the royalty fee.
For a prospective Chatime franchisee, this means that you must remit 5.0% of the prior month's gross sales (as defined above) to Chatime by the tenth of each month. Accurately tracking gross sales, deductions, and sales taxes is crucial for compliance and to avoid potential discrepancies or penalties. This is a standard practice in franchising, where royalty fees are typically a percentage of gross sales and are paid on a regular basis.