From whom must a Chatime Developer purchase all Raw Materials sold in the Outlets, and what is the exception to this requirement?

According to Chatime's 2025 Franchise Disclosure Document, a Developer must purchase all Raw Materials sold in the Outlets from Chatime, unless otherwise provided in writing by Chatime. If Chatime provides written permission, the Developer must purchase all Raw Materials from suppliers approved by Chatime in writing.

This requirement ensures that Chatime maintains control over the quality and consistency of the products used in its outlets. By mandating that Raw Materials are sourced from Chatime or its approved suppliers, Chatime aims to uphold its brand standards and protect its reputation. This also allows Chatime to potentially profit from the sale of Raw Materials to its Developers.

For a prospective Chatime Developer, this means they will likely be required to purchase all Raw Materials from Chatime, impacting their costs and potentially reducing their profit margins. However, if Chatime permits purchasing from approved suppliers, the Developer may have an opportunity to negotiate better pricing or terms, but only with suppliers that Chatime has already vetted and approved. It is important for a prospective franchisee to understand the pricing structure and terms of trade for Raw Materials to assess the potential profitability of a Chatime franchise.