Are Chatime's criteria for approving suppliers available to franchisees or proposed suppliers?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
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Our criteria for approving suppliers is not available to you or your proposed suppliers. You or the supplier may request approval by submitting a written request to us. We may require that samples from the supplier be delivered to us or to a designated independent testing laboratory for testing prior to approval. All requests will be reviewed in accordance with our then-current procedures and subject to our available resources for review. You or the supplier will be required to reimburse us for all costs that we incur in the testing and approval process whether the supplier is approved or not. The supplier must meet our then-current specifications, standards, and requirements, which may include signing a non-disclosure agreement or a performance guarantee. We may change our specifications, standards, and requirements at any time and there is no limit on our right to do so. If the supplier that you propose is initially approved or disapproved, we will notify you and the supplier within 30 to 60 days depending on the nature of the products or services. We may withdraw our approval at any time if the supplier's performance does not meet our criteria, we change our specifications, standards or requirements, or for other reasons. If an approved supplier's approval is revoked, we will inform you of the revocation and you will cease to use that supplier.
We may limit the number of potential suppliers that we consider for approval. For some categories of products, we may designate a third party or ourselves as an exclusive supplier. We currently have exclusive supplier arrangements for some categories of products or services.
You must offer forsale the complete range of approved products. The approved products are listed in the Operations Manual (or as otherwise notified by the Franchisor). You are required to purchase an adequate and balanced quantity of stock of approved products. Inventory/stock requirements will be detailed in the Operations Manual or directly communicated to you. Inventory/stock requirements will be predominantly influenced by historical data and experience across the franchised network. There is an obligation to purchase an inventory of stock for opening the franchised business.
Our policy for approved products and approved suppliers is intended to ensure the consistency and quality of product standards and branding of the System and to protect the intellectual property of the Franchisor and to assist the Franchisee to comply with all laws and regulations.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–25)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the criteria for approving suppliers are not available to franchisees or proposed suppliers. However, franchisees or their proposed suppliers can request approval by submitting a written request to Chatime. Chatime may then require samples from the supplier for testing, either by Chatime or an independent laboratory.
The franchisee or supplier is responsible for reimbursing Chatime for all costs associated with the testing and approval process, regardless of whether the supplier is ultimately approved. To be approved, the supplier must meet Chatime's current specifications, standards, and requirements, which may include signing a non-disclosure agreement or a performance guarantee. Chatime retains the right to change these specifications, standards, and requirements at any time.
Chatime will notify the franchisee and supplier of the approval or disapproval decision within 30 to 60 days, depending on the nature of the products or services. Chatime can withdraw approval at any time if the supplier's performance does not meet their criteria, if Chatime changes its specifications, standards, or requirements, or for other reasons. If approval is revoked, Chatime will inform the franchisee, who must then cease using that supplier.
Chatime may also limit the number of potential suppliers considered for approval and may designate exclusive suppliers for certain product categories. This policy aims to ensure consistency and quality of product standards and branding within the Chatime system and to protect the franchisor's intellectual property.