Following a merger, can Chatime operate or franchise other businesses using Chatime's Marks and Intellectual Property?

According to the 2025 Chatime FDD, Chatime retains specific rights regarding the use of its Marks and Intellectual Property, even after a potential acquisition. Chatime maintains the right to be acquired, directly or indirectly, in whole or in part, by any person(s) who provide products or services similar or dissimilar to those provided by Chatime Stores. This clause protects Chatime's ability to merge with or be acquired by another entity without necessarily restricting its operations or the use of its trademarks.

Chatime also retains the right to operate or grant others the right to operate outlets under or in association with the Marks or any other trademarks or service marks at such locations outside the Territory, and on such terms and conditions as Chatime, in its sole discretion, deems appropriate. Chatime can also provide, franchise, license, sell, distribute and market any services or products (under any brand, including but not limited to our Marks) through any Alternative Methods of Distribution in or outside your Territory, including, without limitation, through retail establishments or via the internet. These stipulations allow Chatime to continue its franchising and operational activities, even if there are changes in ownership or structure.

Furthermore, Chatime has the right to establish and promote other franchise systems involving different services or products using different trademarks, and to establish company-owned or franchised outlets for those systems, without offering you the right to participate. Chatime can also acquire and continue to operate, directly or indirectly, any business operating under different trademarks. These rights enable Chatime to diversify its business interests and operate multiple franchise systems, even those that might compete with existing Chatime franchisees, without offering existing franchisees the opportunity to participate in these new ventures. This could potentially lead to increased competition for franchisees.

In summary, the FDD indicates that Chatime maintains considerable control over its Marks and Intellectual Property, allowing it to operate and franchise other businesses, even after a merger or acquisition. This includes the ability to use its Marks for different services and products, establish new franchise systems, and operate businesses under different trademarks. Prospective franchisees should be aware of these retained rights, as they could impact the competitive landscape and the opportunities available to them.