What must a Chatime Developer submit to the Franchisor when notifying them of their intention to exercise the option to renew?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Developer must notify Franchisor in writing of its intention to exercise the Option not more than 12 Months and not less than 8 Months prior to the end of the Initial Term.
- (3) The Option is subject to all of the following conditions being satisfied:
- (a) At the time of notifying Franchisor of its intention to exercise the Option, Developer delivers to Franchisor in writing a proposed development schedule (Revised Development Schedule) for the New Term. During the 3-Month period following Franchisor's receipt of the Revised Development Schedule, Franchisor will either notify Developer in writing that the Revised Development Schedule is acceptable or will attempt to negotiate a Revised Development Schedule that is mutually agreeable to Franchisor and Developer. The parties will negotiate any Revised Development Schedule in good faith and act reasonably in all negotiations.
- (b) If the Revised Development Schedule proposed by Developer under clause 2.7(3)(a) is accepted by Franchisor, or if a Revised Development Schedule is mutually agreed upon within the 3-Month period specified in clause 2.7(3)(a), Franchisor will deliver to Developer its then-standard multi-unit development business agreement (which may contain different terms and conditions to those set out in this Agreement and other significant provisions, but deleting any references to enter into a new development business agreement for a new term unless agreed to the contrary by Franchisor) which will reflect the agreed Revised Development Schedule.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a Developer must provide a proposed development schedule in writing to Chatime when notifying them of their intention to exercise their option for a new term. This proposed schedule is referred to as the Revised Development Schedule. The notification must be made not more than 12 months and not less than 8 months before the end of the initial term.
Following Chatime's receipt of the Revised Development Schedule, Chatime has a 3-month period to either accept the schedule in writing or attempt to negotiate a mutually agreeable Revised Development Schedule with the Developer. Both parties are expected to negotiate in good faith and act reasonably during these negotiations.
If Chatime accepts the Developer's proposed Revised Development Schedule, or if a mutually agreeable schedule is reached within the 3-month negotiation period, Chatime will then provide the Developer with its then-standard multi-unit development business agreement. This agreement will reflect the agreed-upon Revised Development Schedule, although it may contain different terms and conditions from the original agreement. This ensures that the future development plans are clearly defined and agreed upon before the renewal proceeds.