Does the franchisee understand that Chatime and its affiliates can issue franchises or operate competing businesses at locations they determine?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(c) provide, franchise, license, sell, distribute and market any services or products (under any brand, including but not limited to our Marks) through any Alternative Methods of Distribution in or outside your Territory, including, without limitation, through retail establishments or via the internet;
(d) to establish and operate, and grant to others the right to establish and operate, Chatime Stores at locations anywhere outside the Territory, including locations near, on or adjacent to your Territory's boundaries;
(e) offer and sell to persons in or outside your Territory, using the Marks, services and products that are the same as the services and products offered by Chatime Stores, including without limitation the Products and the Raw Materials;
(f) in or outside your Territory, to offer and sell different services and products not offered within a Chatime Store, using the Marks, without offering you the right to participate;
(g) acquire and continue to operate, directly or indirectly, any business operating under different trademarks outside the Territory;
(h) acquire and retain, directly or indirectly, the rights and obligations of any franchisor or licensor of any business similar to an Chatime Store operating under different trademarks outside the Territory;
(i) in or outside the Territory, to establish and promote other franchise systems involving different services or products using different trademarks, and to establish company-owned or franchised outlets for those systems, without offering you the right to participate;
(j) offer and sell franchising rights to Multi-Unit Developers who are located outside the Territory;
(k) be acquired, directly or indirectly, in whole or in part, by any person(s) who provide products or services similar or dissimilar to those provided by Chatime Stores;
(l) provide, offer, sell and grant others the right to provide, offer and sell services and goods similar to and/or competitive with those provided at Chatime Stores, whether identified by the Marks or other trademarks or service marks, at festivals, cultural or trade exhibitions, or other public events, both inside and outside the Territory; and
(m) develop, manufacture, distribute, and/or sell Raw Materials and other Products through any channel of distribution (including, without limitation, via the Internet) under or in association with the Marks or any other trademark.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime retains significant rights regarding the operation and franchising of outlets, including the right to operate or grant others the right to operate outlets under the Chatime brand or other brands, even in locations that may be near or adjacent to a franchisee's territory. Specifically, Chatime can establish Chatime stores outside the franchisee's territory, even near the territory's boundaries. Chatime can also offer and sell products and services identical to those offered by Chatime stores to anyone, regardless of location.
Chatime also retains the right to offer and sell different services and products not offered within a Chatime store, using the Chatime trademarks, without offering the franchisee the right to participate. They can acquire and operate businesses under different trademarks outside the franchisee's territory and establish other franchise systems with different services or products using different trademarks, without offering the franchisee the right to participate. Chatime can also be acquired by entities that provide similar or dissimilar products/services.
Furthermore, Chatime can provide and sell goods/services similar to those at Chatime stores, whether identified by Chatime's trademarks or other trademarks, at public events both inside and outside the franchisee's territory. They also have the right to develop, manufacture, distribute, and/or sell raw materials and other products through any distribution channel, including the Internet, under the Chatime trademarks or any other trademark.
This means that a Chatime franchisee's territory is not exclusive in the sense that Chatime and its affiliates can operate or franchise competing businesses in various ways, potentially impacting the franchisee's market and revenue. A prospective franchisee should carefully consider these retained rights and their potential impact on their business before investing in a Chatime franchise.