Is a Chatime franchise limited to a specified territory?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Franchise Agreement grants you the right to operate a single Chatime Store in a location approved by usin a designated territory ("Territory") identified in your Franchise Agreement. You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
The designated territorial rights to the protected territory granted to you under the Franchise Agreement are contingent upon complying with your obligations under the Franchise Agreement. We have the right to terminate or reduce your designated territorial rights or to terminate your Franchise Agreement if you fail to comply with your obligations under the Franchise Agreement.
There is no minimum Territory. Your Territory will typically be a two-mile radius around your approved location, unless your approved location is located in a major metropolitan downtown area or similarly-situated/populated central business district (a "Central Business District"). If your approved location is located in a Central Business District, your Territory may be limited to a geographic area comprised of anywhere from a radius of two blocks to two miles around your approved location, as we deem appropriate in our discretion. The size of your Territory may vary from the territory granted to other franchisees based on the location and demographics surrounding your approved location.
The boundaries of your Territory may be described in terms of zip codes, streets, landmarks (both natural and man-made) or county lines, or otherwise delineated on a map. The sources we use to determine the population within your Territory will be publicly available population information (such as data published by the U.S. Census Bureau or other governmental agencies and commercial sources).
Source: Item 16 — Restrictions on What the Franchisee May Sell (FDD pages 42–43)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a franchisee is granted the right to operate a single Chatime store within a designated territory. However, this territory is not exclusive, meaning a franchisee may face competition from other franchisees, company-owned outlets, or other channels of distribution. The grant of territorial rights is contingent upon the franchisee's compliance with the Franchise Agreement, and Chatime has the right to terminate or reduce these rights if the franchisee fails to meet their obligations.
The size of a Chatime territory typically extends to a two-mile radius around the approved location. However, if the location is in a major metropolitan downtown area or a similarly populated central business district, the territory may be limited to a smaller geographic area, ranging from a radius of two blocks to two miles, as determined by Chatime. The boundaries of the territory can be defined using zip codes, streets, landmarks, or county lines, and the population within the territory is determined using publicly available information.
Chatime retains significant rights regarding the use of trademarks and the System, even within a franchisee's territory. Chatime may establish and operate Chatime stores outside the territory, sell goods and services through alternative channels of distribution like the Internet, and establish stores in non-traditional locations such as airports or convenience stores, regardless of their proximity to the franchisee's store. The franchisee is not entitled to compensation for orders solicited or accepted within their territory through these alternative channels. These stipulations highlight that while a territory is assigned, Chatime maintains considerable flexibility in its operations and distribution strategies, which could impact a franchisee's business.