Can Chatime distribute goods or services through the internet under its trademarks, regardless of the destination of the products or services?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the absolute right to distribute goods or services through the use of the Internet or other electronic communications, telephone, mail, or similar methods, under our trademarks or any other marks, regardless of the destination of the products or services. If we elect to distribute goods or services in your Territory through alternative distribution methods or channels, we are under no obligation to compensate you for conducting business, or soliciting or accepting orders, inside your Territory through such means.
There are no restrictions on your soliciting or accepting orders outside your Territory. However, we retain the sole right to use our trademarks on the Internet, including in connection with websites, domain names, directory addresses, metatags, as graphic images on webpages, linking, advertising, co-branding, and other arrangements. You may not maintain a website or social media accounts without our prior written consent. If we do ever approve of a website that you promote and develop, we have the right to condition our approval on the terms that we determine are necessary, such as requiring that your domain name and home page belong to us and be licensed to you for your use during the term of your agreement.
Source: Item 12 — Territory (FDD pages 35–38)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime retains the absolute right to distribute goods or services through the internet or other electronic means, using its trademarks or other marks, irrespective of where the products or services are headed. This means that Chatime can sell online without any geographic limitations.
This right extends to other alternative channels of distribution such as telephone and mail. Chatime is not obligated to compensate franchisees even if these alternative distribution methods solicit or accept orders within a franchisee's territory. This could create competition for franchisees within their own territories, as Chatime can directly reach customers through online sales without sharing any of the revenue with the franchisee.
Furthermore, franchisees are restricted from using Chatime's trademarks on the internet without prior written consent. This includes websites, domain names, and social media accounts. If a franchisee is permitted to create a website, Chatime has the right to impose terms, potentially requiring the domain name and homepage to belong to Chatime and be licensed back to the franchisee during the agreement term. This level of control over online presence underscores the importance of understanding the limitations placed on franchisees regarding online sales and marketing activities.
Prospective franchisees should carefully consider these stipulations, as they significantly impact their ability to leverage online channels for business growth and marketing. It is crucial to discuss with Chatime the specific conditions under which franchisees might be allowed to engage in online activities and how these activities would be governed to avoid potential conflicts.