What actions require Chatime Franchisor's written consent regarding the Developer?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
r units to a third party within 60 days after the end of the Offer Period as long as the:
- (a) Developer complies with clause 11.3; and
- (b) Sale or Disposal is not made for less than the price specified in the Offer Notice or on terms and conditions more favorable to the third party than those contained in the Offer Notice.
- (7) If Developer does not sell the Business or allow the Disposal of shares or units within the period referred to in clause 11.4(6) the rights of Franchisor are revived and Developer must not permit any sale or Disposal without first offering the Business to Franchisor in accordance with this clause 11.4.
11.5 No Encumbrances
Developer must not create or allow the creation of any encumbrance over this Agreement, the Franchise or Developer's Operation without first obtaining Franchisor's written consent.
11.6 No Subfranchises
Developer must not lease, license, franchise, or part with possession of Developer's Operation or the Franchise without first obtaining Franchisor's written consent.
11.7 Transfer Upon Death or Incapacitation. Upon the death or permanent incapacity (mental or physical) of any person with a majority or controlling interest in this Agreement, in you, or in all or substantially all of the assets of the Developer's Operations, the executor, administrator, or personal representative of such person shall transfer such interest to a third party approved by Franchisor within one year after such death or mental incapacity. Such transfers, including transfers by devise or inheritance, shall be subject to the requirements in this Clause 11.
11.8 Transfers Void.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, several actions a developer may wish to take require the franchisor's prior written consent. These include disposing of interest in the franchise or the Developer's Operation, creating encumbrances over the Agreement, and leasing, licensing, or franchising the Developer's Operation. Any transfer made without Chatime's prior written consent will be considered void and a material breach of the agreement.
Specifically, Chatime developers must obtain written consent before selling or disposing of their interest in the franchise or operation, whether voluntarily or involuntarily, including due to bankruptcy, divorce, death, or disability. If the developer's offer to sell the business back to Chatime is not accepted, they can proceed with a sale to a third party, but only after receiving written consent from Chatime.
Furthermore, developers cannot create any encumbrance over the franchise agreement or the Developer's Operation without Chatime's written consent. Similarly, they cannot lease, license, or franchise their operation to another party without first obtaining written consent from Chatime. These restrictions ensure that Chatime maintains control over who is involved in the brand and how the business is operated, even in unforeseen circumstances such as death or incapacitation.