What are the criteria for a location to be considered a 'Chatime Store'?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (48) Outlets means Chatime Stores operated under the Chatime System.
Developer must comply with all terms and conditions of any Collateral Agreement and acknowledges that a breach of any Collateral Agreement constitutes a breach of this Agreement.
3 Developer's Development and Operational Obligations
3.1 Separate Franchise Agreement for each Outlet
For each Chatime Store to be developed by Developer in the Development Area during the term of this Agreement, Developer shall enter into Franchisor's then-current form of Franchise Agreement, which may contain materially different terms that the current form of Franchise Agreement.
3.2 Site Selection
(1) Franchisor may from time to time modify site selection criteria and processes. Developer must use the site selection criteria and processes as approved by Franchisor (Development Area Site Selection Criteria) for the selection of sites in the Development Area.
(2) Developer must select sites in the Development Area that it reasonably believes conform with the Development Area Site Selection Criteria.
3.3 Site Approval
- (1) Developer must comply with the Development Quota for each Development Period. The determination as to whether Developer has met its development obligations will be made by Franchisor and based on the number of Outlets opened and operating at the end of a Development Period.
- (2) For the purpose of determining whether the development obligations in clause 2.4(1) have been satisfied, an Outlet that has been opened and in operation and is subsequently rendered inoperable by fire or other casualty (and which is due to no fault of Developer or the applicable Franchisee) or required to be closed due to a Force Majeure Event will be counted towards the satisfaction of the Development Quota. Any other Outlet must be opened and operating in compliance with the applicable Franchise Agreement to be counted towards satisfaction of the Development Quota.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime FDD, an "Outlet" is defined as a Chatime Store operated under the Chatime system. The FDD outlines several factors that contribute to determining whether a location qualifies as a Chatime Store, focusing on site selection criteria, compliance with the Franchise Agreement, and adherence to brand standards.
To be considered a Chatime Store, a location must meet the site selection criteria approved by Chatime. The developer must select sites that conform to these criteria. Furthermore, for each Chatime Store to be developed, the developer must enter into Chatime's current form of Franchise Agreement, which may contain materially different terms than previous agreements.
To meet development obligations, an Outlet must be opened and operating at the end of a Development Period. An Outlet that is temporarily inoperable due to fire or other casualty (through no fault of the Developer) or required to be closed due to a Force Majeure Event will still be counted towards the Development Quota. However, any other Outlet must be opened and operating in compliance with the applicable Franchise Agreement to be counted towards satisfaction of the Development Quota.