Is a Developer Affiliate required to be more than 50% owned by the Developer in the Chatime franchise agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (15) Developer Affiliate means an Affiliate of Developer that is partially (but at least more than 50%) or wholly-owned by Developer.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a Developer Affiliate is defined as an affiliate of the Developer that is at least partially owned by the Developer, with the ownership stake being more than 50%. This means that for an entity to be considered a Developer Affiliate under the Chatime franchise agreement, the Developer must own more than half of that entity.
This requirement ensures that the Developer maintains significant control over its affiliates, aligning their interests with the Developer's obligations under the franchise agreement. This control is important for Chatime to maintain brand consistency and operational standards across all franchised and developed locations.
For a prospective Chatime franchisee, this definition is crucial because it clarifies the relationship and ownership structure required between the Developer and any affiliated entities. If a Developer intends to involve an affiliate in their Chatime operations, they must ensure that they retain majority ownership to comply with the franchise agreement. This could impact how the Developer structures their business and manages their investments in the Chatime franchise.