When a Chatime franchisee proposes an assignment, what details must they give to the franchisor?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Gives to Franchisor all details of the proposed assignment including a copy of the applicable contract (which must comply with Franchisor's requirements) and any other agreements between Franchisee and the assignee. Franchisee acknowledges that:
- (i) These documents must be provided to Franchisor so that Franchisor can ensure that its interests are protected (for example, that the contract of sale does not purport to sell the Intellectual Property); and
- (ii) Franchisor will not sell the Franchised Business on behalf of Franchisee or negotiate the sale on behalf of Franchisee and does not hold itself out as performing these functions; and
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a franchisee must provide all details of the proposed assignment to Chatime, including a copy of the applicable contract (which must comply with Chatime's requirements) and any other agreements between the franchisee and the assignee. This requirement ensures that Chatime can protect its interests, such as ensuring that the contract of sale does not attempt to sell the intellectual property of the Chatime brand.
This level of detail allows Chatime to thoroughly vet the proposed assignment and ensure that the transfer aligns with their standards and protects their brand. It is standard practice in franchising for the franchisor to have approval rights over any transfer of ownership. This protects the brand and the network of franchisees.
It is important to note that Chatime does not sell the franchised business on behalf of the franchisee or negotiate the sale, nor do they hold themselves out as performing these functions. The franchisee is responsible for finding a buyer and negotiating the terms of the sale, subject to Chatime's approval.