Who bears the expense of relocating a Chatime outlet?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
In the judgment of Franchisor and Franchisee, there is a change in the character of the location of a site sufficiently detrimental to its business potential to warrant its relocation, Franchisor will not unreasonably withhold permission for relocation of the Outlet from the site in question to a site which meets the then-current Territory Site Selection Criteria, subject to the requirements of this Agreement, and subject to the Franchisee executing a Release in the form attached as Exhibit 1. Any such relocation will be at Franchisee's sole expense. Franchisee must seek and obtain Franchisor's approval of the replacement site and development of the new outlet, in accordance with the terms of this Agreement. No New Outlet Fee will be payable to Franchisor provided the replacement site is within a 2 mile radius of the existing site and the new Outlet at the replacement site is opened and operated by the same Franchisee within 90 days of closing the Outlet at the original location. Notwithstanding the foregoing, if the lease term for a new approved location extends beyond the remaining term of the Franchise Agreement, then Franchisor shall extend the Franchise Agreement to align with the end date of the new lease for the new location, and Franchisee shall pay Franchisor a pro rata portion of the then-current New Outlet Fee based on the length of the extension of the term of the Franchise Agreement, provided that the lease term for any new approved location shall not exceed ten years.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisee is solely responsible for the expenses associated with relocating their Chatime outlet. This means that if a franchisee and Chatime agree that the current location is no longer suitable for business and relocation is necessary, the franchisee must cover all costs related to moving to a new site.
However, Chatime's approval is required for the new location, ensuring it meets the brand's site selection criteria. If the replacement site is within a 2-mile radius of the original location and the new outlet is opened and operated by the same franchisee within 90 days of closing the original, the franchisee will not have to pay a New Outlet Fee to Chatime.
Furthermore, if the lease term for the new location extends beyond the remaining term of the Franchise Agreement, Chatime will extend the Franchise Agreement to match the end date of the new lease, up to a maximum lease term of ten years. In this case, the franchisee will pay Chatime a pro rata portion of the then-current New Outlet Fee, based on the length of the extension of the Franchise Agreement.