Is a Chatime franchisee required to purchase all raw materials from the franchisor?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Franchisee must ensure that it:
- (a) Offers for sale from the Outlet the complete range of food and beverages on the Chatime Menu and that such food and beverage items are prepared in accordance with the Chatime Menu;
- (b) Does not offer, sell, or supply any food or beverages that are not specified on the Chatime Menu; and
- (c) Acquires all products (including Raw Materials) required to prepare Products on the Chatime Menu only from Approved Suppliers.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees are required to acquire all products, including raw materials, needed to prepare items on the Chatime menu exclusively from approved suppliers. These approved suppliers are designated by Chatime.
This requirement ensures that all Chatime locations maintain a consistent quality and uniformity in their products. By mandating the use of approved suppliers, Chatime aims to control the ingredients and materials used in its menu items, which helps to protect the brand's reputation and customer expectations.
For a prospective franchisee, this means they will not have the freedom to source their own ingredients or materials. Instead, they must adhere to Chatime's approved supplier list, which may impact their costs and operational flexibility. It is important for potential franchisees to understand the terms and conditions of these supplier agreements, including payment terms and any potential volume requirements, to accurately assess their potential profitability and operational logistics.
It would be prudent for a prospective Chatime franchisee to inquire about the process for becoming an approved supplier, the criteria used for selecting these suppliers, and whether there are any restrictions on the number of approved suppliers for specific raw materials. Understanding these aspects can provide a clearer picture of the supply chain dynamics and potential opportunities or challenges within the Chatime franchise system.