According to the Chatime FDD, can the Franchisor be an 'Approved Supplier'?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
It is Agreed
Definitions and Interpretation
1.1 Definitions
The following words have these meanings in this Agreement unless the contrary intention appears:
- (1) Affiliate means any Person that directly or indirectly Controls, that is directly or indirectly Controlled by, or that is under Common Control or Controlling Interest with, a specified Person.
- (2) Agency means any governmental entity or agency.
- (3) Agreement means this document, including any schedule or annexure to it.
- (4) Alternative Methods of Distribution means any alternative distribution methods or channels (such as sales to grocery stores, sales via direct mail, subscriptions, or the internet, or other alternative distribution methods or channels.
- (5) Approved Supplier means Franchisor or a supplier or suppliers approved in writing by Franchisor for the supply of Products and equipment to Franchisee.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisor can be an 'Approved Supplier'. The FDD defines 'Approved Supplier' as Chatime or a supplier approved in writing by Chatime for supplying products and equipment to franchisees.
This means that Chatime franchisees may be required to purchase some or all of their supplies directly from the franchisor. Alternatively, franchisees may need to source supplies from a list of pre-approved vendors. Chatime retains the right to approve or revoke its approval of any supplier.
If a franchisee wants to use a new supplier, they must get approval from Chatime. This process involves providing product samples, supplier information, and allowing inspections of the supplier's facilities. The franchisee will also be responsible for covering all costs associated with Chatime's evaluation of the proposed supplier. Chatime or its affiliates may also receive payments from approved suppliers based on the supplier's transactions with franchisees.