Is Chatime allowed to acquire and continue to operate any business operating under different trademarks in or outside the Development Area?

According to Chatime's 2025 Franchise Disclosure Document, Chatime retains the right to acquire and continue to operate any business under different trademarks both within and outside a franchisee's Development Area. This means that Chatime is not restricted from owning or operating competing businesses, even those with different branding, regardless of their proximity to a franchisee's location.

This clause in the franchise agreement highlights a potential risk for franchisees. Chatime could, in theory, acquire a competing business and operate it in the same area as a franchise, which could draw customers away from the Chatime location. This retained right gives Chatime significant control over the market and could impact a franchisee's profitability.

It is important for prospective franchisees to understand that this right retained by Chatime is common in many franchise agreements. Franchisees should carefully consider the potential impact of this clause and discuss it with Chatime during their due diligence. Understanding Chatime's long-term strategy and potential acquisition plans could help a franchisee assess the risk involved.