What was the Consent Order number related to Chatime USA, LLC in the State of Washington?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
osts to New York.
In re Chatime USA, LLC, State of Washington, Department of Financial Institutions, Securities Division, Consent Order No. S-19-2701-19-0001. On or about August 4, 2016, our affiliate Chatime USA LLC entered into a five-year Master Franchise Agreement with a Canadian company based in Edmonton, Alberta (the "Alberta Master Franchisee") pursuant to which our affiliate Chatime USA LLC granted the Alberta Master Franchisee master franchise rights in Washington. In 2019, the Washington Department of Financial Institutions (the "Department") began an investigation into our affiliate Chatime USA LLC's prior franchising activities in connection with its application for franchise registration. The Department concluded that the sale to the Alberta Master Franchisee violated Washington franchise law because (i) Chatime USA LLC granted master franchise rights to the Alberta Master Franchisee in Washington without first obtaining franchise registration in Washington, and (ii) Chatime USA LLC did not provide the Alberta Master Franchisee with a U.S. disclosure document. Under the terms of a consent order dated September 16, 2019, our affiliate Chatime USA LLC agreed to cease and desist from the sale of franchises in Washington in violation of Washington franchise law and paid the Department $2,500 for the costs of
Source: Item 3 — Litigation (FDD pages 10–11)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime USA, LLC was subject to Consent Order No. S-19-2701-19-0001 in Washington State. This order stemmed from an investigation by the Washington Department of Financial Institutions into Chatime USA LLC's franchising activities. The investigation concluded that Chatime USA LLC had violated Washington franchise law by granting master franchise rights without proper registration and by failing to provide a U.S. disclosure document to the Alberta Master Franchisee.
Under the terms of the consent order, which was dated September 16, 2019, Chatime USA LLC agreed to cease and desist from selling franchises in Washington in violation of franchise law. Additionally, Chatime USA LLC paid $2,500 to cover the costs of the Department's investigation.
For a prospective franchisee, this information indicates that Chatime has faced regulatory scrutiny in the past regarding its franchise sales practices. While the issue was resolved through a consent order, it highlights the importance of ensuring that Chatime is in full compliance with all applicable franchise laws and regulations in the relevant jurisdiction. A prospective franchisee should carefully review Chatime's compliance history and seek assurances that all necessary registrations and disclosures are current and accurate.