Does the definition of 'Disposal' for a Chatime franchise include indirect sales?

According to Chatime's 2025 Franchise Disclosure Document, the definition of "Disposal" includes indirect sales. Specifically, the FDD states that disposal includes any voluntary, involuntary, direct, or indirect sale, assignment, pledge, bequeath, trade, or transfer. This definition is relevant to the transfer of a Chatime franchise by a franchisee.

This definition extends to transactions involving ownership interests in a business entity. Disposal includes entering into a transaction where someone other than the registered holder acquires a legal or equitable interest, the right to receive dividends, rights of pre-emption, or control over voting rights. It also covers situations where someone gains legal or equitable rights that effectively place them in the same position as having acquired an interest in the ownership.

For a prospective Chatime franchisee, this broad definition of "Disposal" means that any transfer of ownership, whether direct or indirect, is subject to the terms outlined in the Franchise Agreement. This includes not only outright sales but also any transaction that alters control or beneficial ownership of the franchise. Franchisees need to be aware of these restrictions and approval requirements when considering any form of transfer or change in ownership structure.