What conditions might Chatime impose on a supplier's approval, and what inspections might Chatime require?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) If Franchisee requests approval of a new alternate supplier, Franchisee shall provide Franchisor with samples of the proposed alternate supplier's product, all information and back-up documentation requested by Franchisor concerning the proposed alternate supplier and its products, and access to inspect the proposed alternate supplier's production facilities, and Franchisee shall pay Franchisor for all of its costs and expenses in evaluating and deciding upon the request, including without limitation out of pocket expenses, compensation for the time spent evaluating the request, and overhead expenses.
- (3) Approval of a supplier by Franchisor may be conditional on the supplier meeting Franchisor's quality and standards requirements. Franchisor may require any supplier applying for approval to allow Franchisor to inspect the proposed supplier's facilities to assist Franchisor in determining if the proposed supplier meets Franchisor's criteria.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, supplier approval may be conditional on meeting Chatime's quality and standards requirements. Chatime may also require a supplier applying for approval to allow them to inspect the supplier's facilities to assist in determining if the proposed supplier meets Chatime's criteria.
If a franchisee requests approval of a new alternate supplier, the franchisee must provide Chatime with samples of the proposed supplier's product and all information and back-up documentation requested by Chatime concerning the proposed alternate supplier and its products. The franchisee must also provide access to inspect the proposed alternate supplier's production facilities and pay Chatime for all costs and expenses in evaluating and deciding upon the request, including out-of-pocket expenses, compensation for the time spent evaluating the request, and overhead expenses.
These stipulations ensure that Chatime maintains consistent product quality and standards across all franchise locations. The financial burden for the evaluation of new suppliers falls on the franchisee, which is a crucial consideration when seeking alternative suppliers. Franchisees should carefully weigh the potential benefits against the costs associated with the approval process.