What is the 'Development Quota' for a Chatime multi-unit development agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
We also offer multi-unit development agreement franchises to qualified persons who must establish certain minimum numbers of Chatime Stores within a designated geographic territory (a "Development Territory"). If we grant you a multi-unit development agreement franchise, you will execute our standard form of multi-unit development agreement attached as Exhibit C (the "Multi-Unit Development Agreement") and be granted the right to begin opening Chatime Stores in your Development Territory (the "Development Rights"). Your master franchise business includes the obligation to open a certain number of Chatime Stores in your Development Territory in accordance with a specified schedule (the "Development Quota"). Upon establishing each additional outlet under the Multi-Unit Development Agreement, you will be required to sign our then-current Franchise Agreement, which may differ from the current Franchise Agreement included with this Franchise Disclosure Document. If you fail to meet your Development Quota or fail to comply with any financial obligation relating to the Development Rights, we may terminate your Development Rights, reduce or eliminate your Development Territory or the territorial protections provided under your Multi-Unit Development Agreement, or take other action we deem appropriate in our discretion.
Source: Item 1 — The Franchisor, and Any Parents, Predecessors, and Affiliates (FDD pages 6–9)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a multi-unit development agreement requires franchisees to establish a minimum number of Chatime stores within a designated geographic territory, referred to as the "Development Territory." This obligation is formally known as the "Development Quota," and it necessitates opening a specific number of Chatime stores according to a predetermined schedule.
If a franchisee fails to meet the Development Quota or does not fulfill any financial obligations related to the Development Rights, Chatime has the right to take corrective actions. These actions may include terminating the Development Rights, reducing or eliminating the Development Territory, removing territorial protections provided under the Multi-Unit Development Agreement, or pursuing other actions deemed appropriate by Chatime at its discretion.
Prospective franchisees should carefully consider the implications of the Development Quota and the potential consequences of not meeting it. It is crucial to fully understand the schedule and financial obligations associated with the multi-unit development agreement before entering into such an agreement with Chatime. Further details regarding the specific number of stores, the timeline for opening them, and the financial obligations can likely be found in Exhibit C, the standard form of multi-unit development agreement.