Does the definition of 'Interested Party' for Chatime include a person with a former relationship of cohabitation with someone who has an interest in the Chatime franchise?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(34) Interested Party means any of the following persons designated by Franchisor:
(a) Any person with a direct or indirect legal or beneficial interest in Franchisee, including an interest in any entity directly or indirectly controlling Franchisee (Controlling Entity), or in Franchisee's assets and any person who is an officer, as defined in the applicable domestic legislation, of Franchisee or any Controlling Entity; and
(b) A spouse, child or person with an existing or former relationship of cohabitation, lineal relatives by blood or by marriage or collateral relatives by blood or by marriage of any person specified in clause 1.1(21).
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the definition of "Interested Party" does include a person with a former relationship of cohabitation with someone who has an interest in the Chatime franchise.
The FDD specifies that an "Interested Party" includes not only those with direct or indirect legal or beneficial interest in the franchisee or its controlling entity, but also extends to certain relatives and persons with specific relationships to those individuals. This definition is important because it broadens the scope of individuals who may be subject to certain obligations or restrictions under the franchise agreement, such as confidentiality and non-competition agreements.
For a prospective Chatime franchisee, this means that their spouse, children, and individuals with whom they have a current or former cohabitative relationship, as well as certain relatives, could be considered "Interested Parties." As such, these individuals may be required to enter into confidentiality and non-competition agreements with Chatime. This requirement aims to protect Chatime's confidential information and prevent unfair competition, but it also places obligations on individuals who may not be directly involved in the operation of the franchise.
It is important for potential franchisees to fully understand the implications of this definition and to discuss it with any individuals who may fall under the definition of "Interested Party" before entering into a franchise agreement with Chatime. This ensures that all parties are aware of their obligations and can make informed decisions.