According to Chatime's 2025 Franchise Disclosure Document, an 'Affiliate' is defined as any entity that directly or indirectly controls, is controlled by, or is under common control or controlling interest with a specified person. This definition is crucial for prospective franchisees as it clarifies the scope of Chatime's network and the entities with which they might interact.

The term 'Control, Controlled by, or under Common Control or Controlling Interest' is further defined as the direct or indirect possession of the power to direct or cause the direction of the management or policies of any other Person, whether through more than 50% of the ownership of voting interest, by contract, or otherwise. This broad definition means that control can be exerted through various means, not just majority ownership, which could include contractual agreements or other arrangements that give an entity the power to influence management decisions.

Understanding the definition of 'Affiliate' is important for franchisees because it can impact various aspects of their business relationship with Chatime. For example, Chatime retains rights on behalf of itself and its affiliates, including the right to operate or grant others the right to operate outlets under the Chatime brand outside the franchisee's territory. Additionally, franchisees may enter into collateral agreements with Chatime or its affiliates, making it essential to understand the full scope of entities considered affiliates.