What is the total estimated initial investment for a Chatime franchise (Item 7), considering the initial franchise fee (Item 5)?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ree months, unless otherwise indicated:
| Estimated Amount | Method of | When | Payable to | ||
|---|---|---|---|---|---|
| Type of Expenditure | |||||
| Range | Payment | Payable | Whom | ||
| Initial Franchise Fee(1) | $54,900 | Lump sum | Upon signing Franchise Agreement | Us | |
| Initial Training, Opening | $5,000 | As arranged | As incurred | Us | |
| Support and | |||||
| Related Personnel Cost(2) | |||||
| Rent(3) | $6,000 to $33,000 | As arranged | As specified in lease | Landlord | |
| Lease Security Deposit (3) | $4,000 to $22,000 | As arranged | As specified in lease | Landlord | |
| Storage Space Deposit(3) | $0 to $1500 | As arranged | As specified in lease | Third party | |
| Leasehold Improvements (4) | $135,000 to $226,000 | As arranged | As incurred | Third party or Us | |
| Equipment (5) | $33,500 to $46000 | As arranged | As incurred | Third party | |
| External Signage | $4,200 to $9,500 | As arranged | As incurred | Third party | |
| Estimated Amount | Method of | When | Payable to | ||
| Type of Expenditure | Range | Payment | Payable | Whom | |
| Opening Inventory and | $10,000 to $16,000 | As arranged | As incurred | Our affiliates | |
| Supplies(6) | |||||
| Grand opening marketing(7) | $10,000 | As arranged | As incurred | Third parties | |
| Licenses, Permits, and | $3,500 to $5,500 | As arranged | Lump sum | Third party | |
| Utility Deposits(8) | |||||
| Technology Systems(9) | $10,500 to $14,000 | As arranged | As incurred | Third party or us | |
| Uniforms | $500 to $1,500 | As arranged | As incurred | Us or third party | |
| Insurance(10) | $3,000 to $6,000 | As arranged | As incurred | Third party | |
| Professional Fees | $1,000 to $5,000 | As arranged | As incurred | Third party | |
| Additional Funds – Three | $12,000 to $24,000 | As arranged | As incurred | Third party | |
| Months(11) | |||||
| Total Estimated Initial | $ 293,100 to $479,900 | ||||
| Investment | # Notes: |
- (1) Initial Franchise Fee and Other Fees. You will pay us a non-refundable $54,900 Initial Franchise Fee. All of the fees paid to us are non-refundable except that, 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. Fees paid to vendors or other suppliers may be refundable depending on the vendors and suppliers.
- (2) Initial Training and Related Personnel Cost. We conduct an initial training program for your benefit (the "Initial Training Program"). Prior to and during the period of your Chatime Store opening under your Franchise Agreement, we will provide any on-site portion of the Initial Training Program (the "Initial Training") to you and your employees, up to four persons. The Initial Training will be conducted by one or two Franchisor representatives. You must pay us a fee of $5,000 for each Franchise Agreement. Please note that the complete Initial Training Program generally lasts two weeks and any additional follow-up training (if applicable) generally lasts approximately five to ten days.
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the total estimated initial investment for a single Chatime store ranges from $293,100 to $479,900. This includes the initial franchise fee of $54,900. The initial investment covers various expenses, such as initial training ($5,000), rent ($6,000 to $33,000), lease security deposit ($4,000 to $22,000), leasehold improvements ($135,000 to $226,000), equipment ($33,500 to $46,000), external signage ($4,200 to $9,500), opening inventory and supplies ($10,000 to $16,000), grand opening marketing ($10,000), licenses, permits, and utility deposits ($3,500 to $5,500), technology systems ($10,500 to $14,000), uniforms ($500 to $1,500), insurance ($3,000 to $6,000), professional fees ($1,000 to $5,000), and additional funds for the first three months of operation ($12,000 to $24,000). These costs are payable to Chatime, landlords, third parties, or affiliates, depending on the expense.
For franchisees considering a multi-unit development agreement, the initial investment varies based on the number of locations. For a development agreement covering three to ten locations, the total estimated initial investment ranges from $373,100 to $699,900. This investment includes a multi-unit development fee ranging from $134,900 to $274,900, which covers the initial franchise fee for each individual Chatime store under the agreement. The remaining portion of the investment covers the estimated initial investment to open the initial Chatime store, ranging from $238,200 to $425,000.
It is important to note that these are estimates, and actual costs may vary depending on factors such as location, store size, and specific circumstances. For example, rental costs can vary significantly based on real estate values in the area and the type of property secured. Similarly, leasehold improvement costs can be affected by the extent of redesign or any extraordinary costs related to permitting or environmental issues. Prospective franchisees should carefully review all the components of the initial investment and conduct thorough due diligence to determine their specific costs.
Chatime also offers multi-unit development agreements where the multi-unit development fee serves as a credit against the initial franchise fee for each location. For two locations, the multi-unit development fee is $98,900. For three locations, it is $134,900. For more than three locations, the fee is $134,900 plus $20,000 for each additional location. This fee is non-refundable and is earned by Chatime upon receipt, regardless of the number of units opened. This structure can be advantageous for franchisees planning to open multiple locations, as it streamlines the initial fee payment process.