What development efforts must a Chatime developer cease upon termination or expiration of the MDA?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| i. Franchisee's obligations on termination/non-renewal | FA: §17 | Upon expiration or termination of your Franchise Agreement, you will immediately (i) cease directly or indirectly identifying yourself as a current or former franchisee, (ii) deliver to us all copies of the Operations Manual and Global Policies and Procedures, all forms of stationery, business cards, all advertising materials, original and all copies of databases and supplier lists, and all other property of ours, (iii) discontinue and forever cease use of the System name, the Trademarks, any trade name, trademark, or commercial symbol that suggests any association with us, and any of our confidential information and other Intellectual Property, (iv) remove all signage containing any of our trademarks or any marks deceptively similar to them, (v) execute all documents we require to transfer, assign, or cancel any trademarks, service marks, domain |
|---|---|---|
| names, or other commercial symbols or intellectual | ||
| property you applied for registration for or registered, | ||
| (vi) | ||
| provide us with all records, files, and other | ||
| materials we require pertaining to your Franchise | ||
| Agreement, | ||
| and | ||
| (vii) | ||
| pay | ||
| all | ||
| unpaid | ||
| monies | ||
| owed | ||
| to | ||
| us | ||
| or | ||
| any | ||
| affiliate | ||
| within | ||
| ten | ||
| business | ||
| days. | ||
| MDA: § 15 | Upon expiration or termination of your MDA, you will immediately (i) cease directly or indirectly identifying yourself as a current or former developer, (ii) ) pay all unpaid monies owed to us or any affiliate within ten business days, and (iii) cease all development efforts. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 43–52)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, upon the expiration or termination of the Multi-Unit Development Agreement (MDA), a developer must immediately take certain actions. These include ceasing to identify themselves, directly or indirectly, as a current or former Chatime developer. Additionally, the developer is obligated to pay all unpaid monies owed to Chatime or any of its affiliates within ten business days.
Most significantly, the Chatime developer must cease all development efforts immediately upon termination or expiration of the MDA. This means that any ongoing activities related to establishing new Chatime locations, such as site selection, construction, or securing permits, must be halted.
This requirement protects Chatime by preventing a former developer from continuing to expand the brand without authorization or potentially benefiting from confidential information gained during the term of the MDA. For a prospective Chatime multi-unit developer, this underscores the importance of fulfilling the terms of the MDA and planning for the possibility of termination or non-renewal, as all development activities must cease immediately, potentially impacting any investments made in ongoing projects.