What condition regarding default status must a Chatime developer meet when seeking consent to an assignment?

According to Chatime's 2025 Franchise Disclosure Document, a key condition for a developer to receive consent for an assignment is their default status. Specifically, when a Chatime developer seeks consent to assign their interest in the Developer's Operation, they must not be in default under the Development Agreement or any Collateral Agreement, both when seeking consent and when the assignment is to occur. This requirement ensures that the developer is in good standing with Chatime before transferring their rights and obligations to another party.

This condition protects Chatime by ensuring that the developer has met their contractual obligations before transferring the development rights. Defaulting on agreements could indicate financial instability or operational issues, which Chatime would want to avoid passing on to a new developer. By requiring the developer to be in compliance, Chatime maintains control over the quality and stability of its franchise network.

For a prospective Chatime developer, this means maintaining diligent compliance with all agreements, including the Development Agreement and any Collateral Agreements. Failure to do so could prevent the developer from selling or transferring their interest in the future. This requirement is fairly standard in franchising, as franchisors typically want to ensure that franchisees are meeting their obligations before allowing them to transfer their rights to someone else.