What is the 'Development Quota' for Chatime franchisees with a Multi-Unit Development Agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
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If you sign a Multi-Unit Development Agreement, you are obligated to open a certain minimum number of Chatime Stores ("Outlets") in your Development Territory in accordance with a specified schedule. ("Development Quota"). You will negotiate the size of your designated Development Territory with us based on your Development Quota.
Your Multi-Unit Development Agreement sets out one or more protected geographic areas ("Development Territory") identified specifically for the development of new Outlets.
Source: Item 12 — Territory (FDD pages 35–38)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees who sign a Multi-Unit Development Agreement are required to open a minimum number of Chatime stores, referred to as "Outlets," within their designated Development Territory, following a specific schedule. This schedule is known as the "Development Quota," and the size of the Development Territory is negotiated with Chatime based on this quota. Chatime does not specify a particular number of stores that must be opened, as this is determined during negotiations.
This means that prospective franchisees entering into a Multi-Unit Development Agreement with Chatime must commit to a development schedule. The specific number of stores and the timeline for opening them will be determined through negotiations with Chatime. The agreement will define the geographic area in which the franchisee is expected to develop these Chatime locations.
It is important to note that Chatime does not require minimum sales quotas for each individual Outlet. However, franchisees must have open and operating no fewer than the number of Outlets specified in their Development Quota. Failure to meet the development quota could result in Chatime terminating the Development Rights, varying the Development Territory, and/or terminating the exclusivity attached to the Development Rights.
Prospective franchisees should carefully consider their ability to meet the negotiated Development Quota before signing a Multi-Unit Development Agreement with Chatime. They should also inquire about the criteria Chatime uses to determine the size and location of the Development Territory and the flexibility available in the development schedule.