According to the Chatime FDD, what constitutes an 'Affiliate' of a specified person?

According to the 2025 Chatime Franchise Disclosure Document, an 'Affiliate' of a specified person is defined as any person or entity that directly or indirectly controls, is directly or indirectly controlled by, or is under common control or controlling interest with that specified person. This definition is crucial for understanding the relationships between Chatime, its franchisees, and other related entities, as these relationships can have implications for various aspects of the franchise agreement.

This definition is important because it clarifies the scope of entities that are considered related to Chatime or its franchisees. Control, in this context, typically refers to the power to direct the management and policies of a person or entity, whether through ownership of voting securities, by contract, or otherwise. Common control implies that multiple entities are ultimately controlled by the same person or entity. The definition ensures that all entities with a significant degree of influence or ownership connection to a specified person are considered affiliates.

For a prospective Chatime franchisee, understanding this definition is essential for several reasons. First, it helps in identifying potential conflicts of interest or related-party transactions that may arise during the franchise relationship. Second, it clarifies the scope of any restrictions or obligations that may extend to affiliates of the franchisee. Finally, it provides a basis for assessing the overall financial stability and business practices of the Chatime network, as the actions and financial health of affiliates can impact the franchise system as a whole. Franchisees should carefully review the franchise agreement and related documents to fully understand the implications of the affiliate definition in their specific circumstances.