According to Chatime's 2025 Franchise Disclosure Document, the principal obligations of a franchisee are outlined in both the Franchise Agreement (FA) and, if applicable, the Multi-Unit Development Agreement (MDA). Item 9 of the FDD provides a table summarizing these obligations, offering a roadmap to locate more detailed information within the agreements and other items of the FDD.

The Franchise Agreement covers a wide array of obligations, referencing specific articles within the agreement. These include site selection and acquisition/lease (Articles 2 and 4), pre-opening purchases/leases (Articles 4 and 6), site development and other pre-opening requirements (Articles 2, 3, 4, and 6), initial and ongoing training (Articles 3 and 4), and the opening process itself (Articles 2, 3, 4, and 5). Further obligations detailed in the Franchise Agreement include fees (Article 6), compliance with standards and policies/Operations Manual (Articles 3, 5, 6, 7, 17, and 25), trademarks and proprietary information (Articles 4, 8, and 11), restrictions on products/services offered (Articles 2, 3, 4, and 5), warranty and customer service requirements (Article 4), territorial development and sales quotas (Article 2), ongoing product/service purchases (Articles 4 and 5), maintenance, appearance, and remodeling requirements (Articles 3, 4, and 5), insurance (Article 5), advertising (Article 7), indemnification (Article 10), owner’s participation/management/staffing (Articles 5, 8, and 9), records and reports (Article 5), inspections and audits (Article 5), transfer (Articles 12 and 13), renewal (Articles 2 and 6), post-termination obligations (Article 17), non-competition covenants (Article 9), dispute resolution (Article 16), and other obligations (Article 25).

For franchisees entering into a Multi-Unit Development Agreement, obligations are also specified across several areas. These include site selection and acquisition/lease (Articles 3 and 4), pre-opening purchase/lease (Articles 3 and 4), site development and other pre-opening requirements (Articles 3 and 4), compliance with standards and policies/Operations Manual (Article 4), trademarks and proprietary information (Article 9), restrictions on products/services offered (Article 4), warranty and customer service requirement (Article 4), territorial development and sales quotas (Article 2 and Schedule 1), owner’s participation/management/staffing (Articles 3 and 4), records and reports (Article 4), inspections and audits (Article 4), transfer (Articles 10 and 11), renewal (Article 2), post-termination obligations (Articles 6, 7 and 15), non-competition covenants (Articles 7 and 15), dispute resolution (Article 14), and other obligations (Article 23). Note that initial and ongoing training, ongoing product/service purchases, maintenance/remodeling, insurance, and advertising are not covered in the Multi-Unit Development Agreement.

Prospective Chatime franchisees should carefully review both the Franchise Agreement and the Multi-Unit Development Agreement (if applicable) in their entirety, along with the referenced FDD Items, to fully understand their obligations and responsibilities. Understanding these obligations is crucial for the success and legal compliance of their Chatime franchise.