Is there a minimum amount that a Chatime franchisee must spend on local marketing?
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. |
| Local Marketing Expenditure | At least 2.0% of Gross Sales | As incurred | We require you to spend at least 2.0% of Gross Sales on local marketing. See Item 11. |
Source: Item 6 — Other Fees (FDD pages 13–17)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to spend a minimum amount on local marketing. Specifically, Chatime mandates that franchisees spend at least 2.0% of their Gross Sales on local marketing efforts. This expenditure is ongoing and is to be incurred as the sales are made.
This requirement ensures that Chatime franchisees actively promote their individual locations within their respective communities. By mandating a minimum spending threshold, Chatime aims to maintain brand visibility and drive local customer engagement. The FDD indicates that further details regarding local marketing can be found in Item 11.
For a prospective Chatime franchisee, this means allocating a portion of their revenue specifically for local marketing initiatives. This could include advertising, promotions, community events, or other activities designed to attract customers to their specific Chatime store. It is important for potential franchisees to understand and budget for this ongoing expense as part of their overall financial planning.