Risk Score
Pending analysis
Investment Range
$293,100 - $699,900
Franchise Fee
$27,490
Total US Locations
19
Business Summary
Chatime Franchise, LLC offers franchises to operate Chatime beverage service establishments, also known as Chatime Stores. These stores specialize in gourmet teas, smoothies, iced beverages, coffee and tea-based drinks, bubble tea, and complementary food products. They also offer related supplies, accessories, and gifts from a specific location within a designated geographic area.
Corporate History
Chatime Franchise, LLC was formed in July 2022 and began offering Chatime franchises in the United States in April 2023. The broader Chatime brand originates from its ultimate indirect parent company, La Kaffa International Co., Ltd., which was formed in Taiwan in March 2004. La Kaffa began operating businesses similar to Chatime Stores in January 2008 and started offering Chatime franchises worldwide in April 2009. Another parent company, Chatime Group Pty Ltd, was incorporated in Australia in July 2018 and has also offered Chatime franchises there since 2009. Prior to the current franchisor, an affiliate called Chatime USA, LLC offered Chatime franchises in the United States from February 2014 to June 2022. As of December 2024, Chatime Franchise, LLC's affiliates owned and operated three company-owned Chatime Stores in Southern California that opened in 2023.
Financial Overview
Investment Range
$293,100 - $699,900
Franchise Fee (Low)
$27,490
Franchise Fee (High)
$54,900
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$172,700
Equipment Costs (High)
$281,500
Working Capital
$18,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
As of December 31, 2024, Chatime Franchise, LLC has sustained net losses and negative cash flows from operations, resulting in a member's deficit of $416,340. The company is actively incurring expenditures to grow its franchise base and expand into new markets. Chatime Franchise, LLC's management anticipates meeting its funding requirements for the next year. The member (Chatime Global LLC) has stated its intent and ability to provide any necessary financial assistance if cash flows from operations and available cash balances are insufficient to meet working capital needs. The financial statements received an unqualified audit opinion.
Financing Details
Chatime Franchise, LLC does not offer any direct or indirect financing to its franchisees. Additionally, Chatime Franchise, LLC does not guarantee any notes, leases, or other financial obligations for its franchisees.
Performance Metrics
Total US Locations
19
Franchised Units
16
Corporate Units
3
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
2
Litigation Summary
Chatime Franchise, LLC has disclosed two past legal cases. One involved an inquiry by the New York Attorney General in December 2018 into an affiliate, Chatime USA LLC, and ultimate parent, La Kaffa, for selling franchises without proper registration. This led to an Assurance of Discontinuance in November 2019, requiring rescission offers to affected franchisees and a $25,000 payment in penalties and costs. The second case, in August 2016, involved an affiliate, Chatime USA LLC, selling master franchise rights in Washington without registration and proper disclosure. This resulted in a consent order in September 2019, where Chatime USA LLC agreed to cease and desist from such sales in Washington and paid $2,500 for investigation costs. Chatime Franchise, LLC states there is no other litigation required to be disclosed.
Bankruptcy History
Chatime Franchise, LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Chatime Franchise Agreement, franchisees must provide written notice to Chatime Franchise, LLC between 8 and 12 months before their initial term ends. They must sign a new franchise agreement, which may have different terms. Franchisees must have substantially complied with all material provisions of their original agreement and any related agreements, and must not be in default. A Renewal Outlet Fee is required, and franchisees must complete any additional training at their own expense. They are also required to execute the new agreement and all necessary documents within 28 days of receipt, sign a General Release of all claims against Chatime Franchise, LLC and its affiliates, and renovate and refurbish their store to current brand standards if it has been operating for 5 or more years.
Training & Support Program
Franchisor Assistance
Chatime Franchise, LLC provides several forms of assistance to its franchisees. Before opening, Chatime provides a two-week initial training program for up to four people, for which franchisees pay a $5,000 fee plus their own travel and living expenses. It also supplies an electronic Operations Manual and assists with site selection by providing criteria and reviewing proposed locations, with approval or disapproval typically within 30 days. Franchisees receive standard generic plans for construction, guidance on approved suppliers for real estate, construction, and design services, and access to a designated point-of-sale system and other technology. After opening, Chatime Franchise, LLC offers ongoing competency-based training, and additional on-site advice, guidance, and support for an extra fee. It also provides ongoing training advice related to store development and operation and may conduct regional or national advertising campaigns. Franchisees are granted a license to use Chatime's intellectual property.
Initial Training Hours
69
Training Location
Various locations including franchisor headquarters, virtually, designated training facilities in Southern California, or the franchisee's store location.
Ongoing Support
After opening, Chatime Franchise, LLC provides ongoing competency-based training for franchisees, senior managers, and guarantors, delivered in person, digitally, or through a blended approach. If franchisees fail to meet training program requirements, additional training will be provided at their cost. Chatime Franchise, LLC may also offer additional on-site advice, guidance, and support for a fee, and provides general ongoing training advice related to store development and operation. The franchisor has the discretion to develop and conduct international or regional advertising and promotional campaigns for the brand.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Chatime Franchise, LLC typically defines a franchise territory as a two-mile radius around the approved store location. However, for stores located in major metropolitan downtown areas or central business districts, the territory may be smaller, ranging from a two-block to a two-mile radius, determined at Chatime Franchise, LLC's discretion. The territory boundaries may be described using zip codes, streets, landmarks, or county lines, and population information from public sources like the U.S. Census Bureau is used to define these areas.
Staffing Notes
Chatime Franchise, LLC requires each Chatime Store to have an Operating Manager who dedicates at least 38 hours per week to directly supervise day-to-day operations. This Operating Manager may be the Managing Owner, or the franchisee may hire a certified individual for this role. The Managing Owner is responsible for overseeing and supervising the business but is not required to work full-time unless they are also the Operating Manager. All managers and key personnel must successfully complete initial training programs and are required to sign confidentiality and non-competition agreements. Franchisees are solely responsible for all aspects of employee management, including recruiting, hiring, training, wages, taxes, benefits, work schedules, discipline, and termination, while complying with all workplace-related laws.