What Franchise Agreement section defines 'MDA' for Chatime?
Chatime Franchise · 2025 FDDAnswer 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 term 'MDA' is defined in Section 7.2(2) of the Franchise Agreement. The FDD clarifies that 'MDA' refers to a 'Restraint Period'.
The Restraint Period lasts for two years following the expiration or termination of the Franchise Agreement. During this time, the franchisee is restricted from certain activities within the 'Restraint Area'. The Restraint Area is defined as (i) the franchisee's Territory, or (ii) any area within twenty-five miles of any Chatime store.
During the Restraint Period, the franchisee and any guarantors are prohibited from engaging in or having an interest in any business within the Restraint Area that offers products or services similar to those offered by the Chatime franchise or that could be considered a competitor. They are also restricted from soliciting customers, employees, or prospective franchisees of Chatime from the twelve months prior to the termination or expiration of the MDA, and from employing anyone who was employed by Chatime or any other franchisee without written consent. These restrictions do not apply if the franchisee continues to operate individual Chatime stores under valid Franchise Agreements that have not been terminated and are not in default. It is important to note that these provisions are subject to state law, which may impact their enforceability.