Under what circumstances would a Chatime franchisee be charged a Temporary Management Fee?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| Uniforms for First | $500 to $1,500 | $500 to $1,500 | $500 to $1,500 |
|---|---|---|---|
| Location | |||
| Initial Training for First | $5,000 | $5,000 | $5,000 |
| Fee(1) Type of | Amount | Due Date | Remarks |
| Audit Fee | Cost of audit | As invoiced | Payable if (i) we find that you have understated any amount you owe to us by more than 2%, or (ii) you fail to furnish reports, supporting records, other information or financial statements as required on a timely basis and we believe an audit is necessary. The Audit Fee includes accountants' fees, legal fees, and associated travel and accommodation expenses for our employees. |
| Interest Rate | The lesser of 1.5% per month or the highest rate allowed by law | As invoiced | If you fail to pay us any amount when due, you will pay interest on that amount at the Interest Rate from the time the amount should have been paid until it is paid. Interest accrues daily and may be capitalized by us. |
| Alternate | Costs incurred | As invoiced | You will reimburse us for our costs to test |
| Supplier Testing | a proposed alternate supplier regardless of | ||
| Fee | whether such supplier is approved. | ||
| Temporary Management Fee | Commercially reasonable fee not less than $30 per hour plus costs of travelling, accommodation, meals, and other expenses for operating and managing the Store | As invoiced | If you cease to conduct operations or abandon your franchise business, we or our nominee may, but are not required to, enter your business premises and operate and manage your franchise business until you comply with our direction or notice requiring you to recommence operations. You will pay us a reasonable Temporary Management Fee we determine and our associated expenses including, without limitation, costs for employee wages and entitlements, tr |
Source: Item 6 — Other Fees (FDD pages 13–17)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a franchisee may incur a Temporary Management Fee if they cease operations or abandon their franchise business. In such cases, Chatime or its nominee has the option, but not the obligation, to step in and manage the store until the franchisee resumes operations as directed by Chatime.
The Temporary Management Fee is designed to cover Chatime's costs and efforts in maintaining the business during the franchisee's absence. This fee will be a commercially reasonable amount, but no less than $30 per hour, plus costs of traveling, accommodation, meals, and other expenses for operating and managing the store.
This fee covers Chatime's expenses, including employee wages and entitlements, travel, accommodations, and meals. The fee is invoiced to the franchisee, who is responsible for payment. This provision protects Chatime and ensures the continued operation of the franchise, while placing the financial burden on the franchisee who caused the disruption.