What is a Chatime Developer prohibited from doing regarding Franchisor's ownership of the Intellectual Property?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ilities and efforts of Developer; and
- (4) The location, design, construction, or renovation of any Outlet or the furnishings, fixtures and equipment to be required, notwithstanding the right of Franchisor to approve any plans, and to inspect the construction and/or renovation work and such Outlet. Such rights of Franchisor are exercised solely for the purpose of ensuring compliance with the terms and conditions of this Agreement.
9 Intellectual Property
9.1 License to Use Intellectual Property
Franchisor grants Developer a license to use the Intellectual Property in the Development Area only during the Initial Term.
- 9.2 Use of Intellectual Property
- (1) Developer must:
- (a) Only use the Intellectual Property as authorized by Franchisor;
- (b) Not alter the Intellectual Property, except with Franchisor's prior written consent; and
- (c) Not do anything which may prejudice Franchisor's ownership of, or the goodwill associated with, the Intellectual Property.
- (2) Developer must not use any other trademarks, corporate or business names, trade names, slogans, domain names or other items of Intellectual Property without the prior written consent of Franchisor.
- 9.3 Ownership of Intellectual Property
Developer acknowledges that by its use of the Intellectual Property, it does not acquire any right to, title or interest in the Intellectual Property. All rights to, and interests in, the Intellectual Property reside with Franchisor.
9.4 Protection of Intellectual Property
- (1) Developer must:
- (a) Provide all reasonable assistance to Franchisor to register and enforce Franchisor's intellectual property rights in the Development Area;
- (b) Take all reasonable steps to protect the Intellectual Property against any action or infringement by any person;
- (c) Immediately notify Franchisor of any actual or potential threat or claim of infringement with respect to the Intellectual Property.
- (2) Franchisor, at its absolute discretion, will determine whether to commence or defend legal proceedings relating to the Intellectual Property.
(3) Payment of all Costs incurred in commencing or defending legal proceedings relating to the Intellectual Property will be made by Franchisor, provided that Franchisor has authorized the taking of any such action.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a Developer is restricted in several ways regarding Chatime's Intellectual Property. The Developer cannot use the Intellectual Property in any way that is not authorized by Chatime. They are not allowed to alter the Intellectual Property without prior written consent from Chatime. Furthermore, the Developer must not take any actions that could harm Chatime's ownership of the Intellectual Property or the goodwill associated with it.
Additionally, the Chatime Developer is prohibited from using any trademarks, corporate or business names, trade names, slogans, domain names, or other intellectual property items without Chatime's prior written consent. The Developer acknowledges that using Chatime's Intellectual Property does not grant them any rights, title, or interest in it; all rights remain with Chatime.
The Chatime Developer must assist Chatime in registering and enforcing its intellectual property rights within the Development Area. They are required to take reasonable steps to protect the Intellectual Property from infringement and must immediately notify Chatime of any potential threats or claims of infringement. The Developer cannot initiate any legal actions related to the Intellectual Property themselves; Chatime has the sole discretion to decide whether to pursue legal proceedings. If the Developer owns any intellectual property similar to Chatime's, they must transfer ownership to Chatime at their own cost.