What might the Chatime franchisor condition its approval on when a franchisee wants to replace the Managing Owner?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Managing Owner. The "Managing Owner" of your Chatime Store is the person named as such in Section 2 of Schedule 1. The Managing Owner is the primary person who will represent your business in your dealings with us and who will be responsible for overseeing and supervising the operation of the Franchised Business. The Managing Owner must be an owner of an equity interest in your business whom we approve. Franchisee agrees that a shareholder, member or partner will serve as your Managing Owner throughout the term of this Agreement. Franchisee may not replace the Managing Owner without Franchisor's prior written approval, which Franchisor may condition on, among other things, attendance and satisfactory completion by the prospective new Managing Owner of our initial training program at Franchisee's expense.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisor's approval to replace a Managing Owner is not guaranteed and may be subject to certain conditions. The Managing Owner of a Chatime store is the primary representative in dealings with the franchisor and is responsible for overseeing the operation of the franchised business. This individual must also hold an equity interest in the business and be approved by Chatime.
Specifically, Chatime may require that the prospective new Managing Owner attend and satisfactorily complete the initial training program at the franchisee's expense. This training is likely comprehensive, as the FDD states that both the Managing Owner and the Operating Manager must attend and complete to Chatime's satisfaction such training programs as Chatime prescribes, including the initial training.
This condition ensures that the new Managing Owner is adequately prepared to manage the Chatime store according to the franchisor's standards. Given the importance of the Managing Owner role, Chatime retains the right to ensure any replacement meets their operational and training requirements. This protects the brand and the network of franchisees.