What details of the proposed assignment must a Chatime Developer provide to the Franchisor, including copies of applicable contracts?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Gives to Franchisor all details of the proposed assignment including a copy of the applicable contract (which must comply with Franchisor's requirements) and any other agreements between Developer and the assignee.
Developer acknowledges that:
- (i) These documents must be provided to Franchisor so that Franchisor can ensure that its interests are protected (for example, that the contract of sale does not purport to sell the Intellectual Property); and
- (ii) Franchisor will not sell Developer's Operation on behalf of Developer or negotiate the sale on behalf of Developer and does not hold itself out as performing these functions; and
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a Developer seeking to assign their rights must provide comprehensive details to Chatime. This includes 'all details of the proposed assignment' and a copy of the 'applicable contract,' which must comply with Chatime's requirements. Additionally, the Developer must provide any other agreements between the Developer and the proposed assignee.
Chatime requires these documents to ensure its interests are protected during the transfer. For example, Chatime wants to confirm that the contract of sale does not attempt to transfer Chatime's intellectual property. This review ensures that the integrity of the Chatime brand and system is maintained even when a Developer transfers their business.
This requirement is a standard practice in franchising, allowing the franchisor to vet potential new franchisees or developers and ensure they meet the brand's standards and will continue to operate the business in a manner consistent with the franchise agreement. It also protects the franchisor's intellectual property and overall network integrity. A prospective Chatime developer should be prepared to provide full transparency regarding the terms of any proposed assignment.