During the Chatime development period, what is the measurement used for the development quota?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Developer must comply with the Development Quota for each Development Period. The determination as to whether Developer has met its development obligations will be made by Franchisor and based on the number of Outlets opened and operating at the end of a Development Period.
- (2) For the purpose of determining whether the development obligations in clause 2.4(1) have been satisfied, an Outlet that has been opened and in operation and is subsequently rendered inoperable by fire or other casualty (and which is due to no fault of Developer or the applicable Franchisee) or required to be closed due to a Force Majeure Event will be counted towards the satisfaction of the Development Quota. Any other Outlet must be opened and operating in compliance with the applicable Franchise Agreement to be counted towards satisfaction of the Development Quota.
- (3) Developer agrees that during the Initial Term, it will at all times faithfully, honestly, and diligently perform its obligations under this Agreement and continuously use its best efforts to promote and enhance the development of the Chatime Network and operation of Outlets within the Development Area.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the development quota for a developer is measured by the number of outlets opened and operating at the end of a development period. Chatime determines whether the developer has met their obligations based on this measurement.
An outlet is counted towards the development quota if it has been opened and is in operation. Even if an outlet becomes inoperable due to fire, casualty (not caused by the developer or franchisee), or a Force Majeure Event, it will still be counted towards the quota. However, any other outlet must be opened and operating in compliance with the applicable Franchise Agreement to be counted towards the satisfaction of the Development Quota.
The developer must diligently perform their obligations under the agreement and continuously use their best efforts to promote and enhance the development of the Chatime network and operation of outlets within the Development Area.