factual

What is the Chatime franchisee's obligation if legal restrictions are imposed on purchasing US dollars or transferring payments to non-residents?

Chatime Franchise · 2025 FDD

Answer from 2025 FDD Document

6.9 Exchange Controls

  • (1) Franchisee must use its best efforts to obtain any consents or authorizations which may be necessary in order to permit timely payments in Dollars of all amounts payable pursuant to this Agreement.
  • (2) If at any time, any legal restriction is imposed upon the purchase of Dollars or the transfer to or credit of a non-resident party with payments in Dollars, Franchisee must notify Franchisor immediately. While such restrictions are in effect, Franchisor may require payment in any currency designated by Franchisor that is available to Franchisee or, at Franchisor's option, may require Franchisee to deposit all amounts due but unpaid as a result of such a restriction in any type of account, in any bank or institution in the Territory designated by Franchisor. Franchisor will be entitled to all interest earned on such deposits. Franchisor may also elect to receive payment in the form of products or services available to Franchisee, the value of which will be based on the actual cost of such products or services to Franchisee. If payment is made in products or services, Franchisee agrees to deliver such products or services to Franchisor or its designated agent or shipper within the Territory.

Source: Item 23 — Receipts (FDD pages 58–262)

What This Means (2025 FDD)

According to Chatime's 2025 Franchise Disclosure Document, a franchisee has specific obligations if legal restrictions are imposed on purchasing US dollars or transferring payments to non-residents. The franchisee must immediately notify Chatime of any such restrictions.

While these restrictions are in effect, Chatime has the option to require payment in another currency that is available to the franchisee. Chatime can also direct the franchisee to deposit all amounts due but unpaid into a designated account at a bank or institution within the territory. Any interest earned on these deposits will belong to Chatime.

Alternatively, Chatime may elect to receive payment in the form of products or services available to the franchisee. The value of these products or services will be based on the franchisee's actual cost. If payment is made in this manner, the franchisee is responsible for delivering the products or services to Chatime or its designated agent or shipper within the territory.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.