What are the dependencies for a Chatime franchisee to have the first opportunity for special distribution opportunities inside their Development Territory?

According to Chatime's 2025 Franchise Disclosure Document, a franchisee's first opportunity for special distribution opportunities within their development territory is contingent upon several factors. These include compliance with all material provisions of their agreements with Chatime and its affiliates, meeting Chatime's criteria for the multi-unit development expansion schedule, and obtaining permission from the party that controls the special distribution opportunities. This means that a franchisee must maintain good standing with Chatime, adhere to the development timeline, and secure approval from the relevant authority to be considered for these special opportunities.

It is important to note that even if these conditions are met, the franchisee is only granted the first opportunity, not a guarantee. Chatime retains significant control over these special distribution channels, and the franchisee's success in securing these opportunities depends on factors beyond their direct control. These special distribution channels include locations such as airports, train stations, and other non-traditional venues.

Furthermore, the FDD emphasizes that franchisees do not have any other rights to pursue special distribution opportunities beyond this first opportunity. This underscores the limited scope of the franchisee's rights in this area and the franchisor's discretion in granting access to these channels. Prospective franchisees should carefully consider these conditions and limitations before entering into a multi-unit development agreement with Chatime.