Does the definition of 'Disposal' for a Chatime franchise include entering into an option agreement?

According to Chatime's 2025 Franchise Disclosure Document, the definition of "Disposal" includes entering into an option agreement. The FDD specifies that a "Transfer" is defined as a "Disposal." Disposal encompasses any voluntary, involuntary, direct, or indirect sale, assignment, pledge, bequeath, trade, or transfer.

For a Chatime franchisee that is a business entity, "Disposal" includes entering into a transaction related to an ownership interest that results in another person acquiring any legal or equitable interest in the ownership interest. This includes an equitable interest arising from a declaration of trust, an agreement for sale and purchase, or an option agreement. It also covers situations where someone acquires the right to receive dividends from the ownership interest, pre-emption rights, or control over voting rights related to the ownership interest.

This definition is important for Chatime franchisees because it clarifies what actions are considered a transfer of ownership, which requires franchisor approval. Entering into an option agreement, even if it doesn't immediately transfer ownership, is considered a "Disposal" and therefore a "Transfer" that triggers the requirements outlined in the franchise agreement. This ensures that Chatime maintains control over who becomes involved in the ownership of its franchises and that all potential owners meet their standards.