Can Chatime or its Affiliates receive payments from Approved Suppliers based on their dealings with Chatime Developers or Franchisees, and how can these amounts be used?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (6) Franchisor or its Affiliates may receive payments from Approved Suppliers on account of such suppliers' dealings with Developer or Franchisees and may use all amounts so received without restriction and for any purpose Franchisor or its Affiliates deem appropriate (unless Franchisor or its Affiliates agree otherwise with the supplier).
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime or its affiliates have the right to receive payments from approved suppliers due to the suppliers' business dealings with Chatime developers or franchisees.
Chatime has the discretion to utilize these received amounts without any restrictions. This means Chatime can use the funds for any purpose they deem appropriate, unless they have a prior agreement with the supplier that specifies otherwise.
For a prospective Chatime franchisee or developer, this arrangement means that while they are required to purchase raw materials and other products from approved suppliers, Chatime may be benefiting financially from these supplier relationships independently. This practice is relatively common in franchising, but it's important for franchisees to understand that Chatime's interests may be aligned with approved suppliers due to these financial incentives.