Is Chatime allowed to issue additional shares or other securities?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(50) Ownership Interest means a direct or indirect, disclosed or undisclosed, legal or beneficial ownership interest or voting right, including, without limitation:
(a) In relation to a corporation, the ownership of shares or other equity interests in the company;
(b) In relation to a limited liability company, the ownership of membership interests or other equity interests in the company;
(c) In relation to a partnership, the ownership of a general or limited partnership interest;
(d) In relation to a trust, the ownership of the beneficial interest of such trust; or
(e) The right to cast some or all of the votes associated with such shares or interests.
(51) Person means an individual, corporation, general or limited partnership, limited liability company, trust, association, or other legal entity.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, it's not explicitly stated whether Chatime is allowed to issue additional shares or other securities. However, the document does define 'Ownership Interest' and 'Person,' which indirectly relate to the ownership and types of entities involved in the franchise.
The FDD defines 'Ownership Interest' as a direct or indirect legal or beneficial ownership interest or voting right. This includes the ownership of shares or equity interests in a corporation or limited liability company, partnership interests, or beneficial interests in a trust. It also includes the right to cast votes associated with such shares or interests. 'Person' is defined broadly as an individual, corporation, partnership, limited liability company, trust, association, or other legal entity.
Because the FDD does not directly address Chatime's ability to issue additional shares, prospective franchisees should seek clarification from the franchisor regarding any restrictions on issuing shares or securities. Understanding these aspects is crucial for assessing the long-term financial structure and potential changes in ownership of the Chatime franchise system.