factual

What is the duration of the Restraint Period for a Chatime franchise after the expiration or termination of the Franchise Agreement?

Chatime Franchise · 2025 FDD

Answer from 2025 FDD Document

rst obtaining our written consent. These provisions are subject to state law. |

MDA: §7.2(2) Defined as a "Restraint Period" which is a period of
two years following the expiration or termination of
your Franchise Agreement in the "Restraint Area"
which is (i) your Territory, or (ii) any area within
twenty five miles of any Chatime Store. During the
Restraint Period, you and any guarantors will not (i)
engage or be concerned or interested in any business
within the Restraint Area that supplies products or
services the same or similar to those at any time
supplied by your franchise business or that could be
reasonably regarded as a market competitor of the
Chatime network or
any Store, (ii) canvass or solicit
any person who was a customer, employee, or
prospective franchisee of ours in the twelve months
prior
to
the
termination
or
expiration
of
your
MDA,
or
(iii)
employ
any
person
who
was
employed
by
us
or
any
other franchisee without first obtaining our written
consent. These provisions shall not apply to your
continued operation
of individual Chatime Stores under
valid Franchise Agreements which have not been
terminated
and
are
not
in
default.
These
provisions
are
subject
to
state
law

| s. Modification of agreement | §25.13 | Your Franchise Agreement may only be modified by the parties in writing.

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, the Restraint Period, also referred to as the non-compete period, lasts for two years following the expiration or termination of the Franchise Agreement. During this time, the franchisee is restricted from engaging in any competitive business within the defined Restraint Area.

The Restraint Area is defined as either the franchisee's original Territory or any area within twenty-five miles of any Chatime store. This means that for a period of two years after leaving the Chatime system, a former franchisee cannot operate or be involved in a similar business that offers products or services comparable to those offered by Chatime within that geographic area. The franchisee is also prohibited from soliciting Chatime's customers, employees, or prospective franchisees from the 12 months prior to termination or expiration.

This restriction does not apply if the franchisee continues to operate individual Chatime stores under valid Franchise Agreements that are not terminated and are not in default. It's important to note that these provisions are subject to state law, which may impact the enforceability or specific terms of the non-compete agreement. Prospective franchisees should carefully consider the implications of this Restraint Period and how it might affect their future business opportunities after their franchise agreement with Chatime ends.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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