What must a Chatime franchisee do promptly after receiving written approval from Chatime to establish an Outlet at a proposed site?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(2) Franchisor may approve a proposed Site for the Outlet being opened subject to reasonable conditions including, without limitation, renovating and remodeling the interior and exterior of the Outlet according to Franchisor's latest design guidelines, as determined in its sole discretion.
- (3) Promptly after receipt by Franchisee of written approval from Franchisor to establish the Outlet at the proposed Site, or after the expiration of the 30 day period specified in clause 4.8(2), Franchisee must itself or must ensure that the relevant Franchisee procures an Occupancy Right in relation to the approved Premises. If the Occupancy Right is procured by lease, license or other approved occupancy right, Franchisee must do so in accordance with clause 4.9. If the Occupancy Right is procured by purchase, Franchisee must return to Franchisor the lease evidencing Franchisee's right to occupy the approved Site 15 days after the purchase has been affected. Franchisee must then ensure that construction and operation of the Outlet is undertaken pursuant to the terms of this Agreement.
- (4) Any relocation of the Outlet beyond a 2-miles radius of the existing Premises or beyond 90 days of closing the Outlet at the original location is deemed opening a new Outlet and subject to all applicable provisions under this Agreement, and Franchisor shall be entitled to the New Outlet Fee.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, after receiving written approval from Chatime to establish an Outlet at a proposed site, a franchisee must promptly procure an Occupancy Right in relation to the approved premises. This means the franchisee must take the necessary steps to secure the legal right to occupy and use the location for their Chatime business.
Specifically, if the Occupancy Right is secured through a lease, license, or other approved occupancy right, the franchisee must proceed in accordance with clause 4.9 of the franchise agreement. Clause 4.9 stipulates that the franchisee must hold the head lease or other Occupancy Right approved by Chatime for the premises. Additionally, the franchisee must obtain a Lease Addendum, signed by the franchisee, Chatime, and the Landlord, in the form attached as Exhibit 2. This addendum gives Chatime the option to assume the lease if the franchisee defaults and requires the landlord to notify Chatime of any defaults by the franchisee.
If the Occupancy Right is secured through a purchase, the franchisee must return the lease evidencing the right to occupy the approved site to Chatime within 15 days after the purchase. Following the procurement of the Occupancy Right, the franchisee must ensure that the construction and operation of the Outlet are undertaken according to the terms of the Franchise Agreement. This involves adhering to Chatime's System Standards for construction, obtaining necessary approvals for plans and specifications, and complying with all legal requirements and lease restrictions.