Is Chatime Franchisor liable for the success or failure of the Developer's operation?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
To the extent permitted by law, Franchisor will have no liability in relation to:
(1) Any approval of premises or a site for an Outlet provided by Franchisor to Developer pursuant to the terms of this Agreement;
- (2) Any other approvals provided by Franchisor to Developer in connection with Developer's Operation pursuant to the terms of this Agreement;
- (3) The conduct of Developer's Operation by Developer, the success or failure of which largely depends upon the business abilities and efforts of Developer; and
- (4) The location, design, construction, or renovation of any Outlet or the furnishings, fixtures and equipment to be required, notwithstanding the right of Franchisor to approve any plans, and to inspect the construction and/or renovation work and such Outlet. Such rights of Franchisor are exercised solely for the purpose of ensuring compliance with the terms and conditions of this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime has limited liability regarding the success or failure of a developer's operation. The document states that the success or failure of the Chatime developer's operation largely depends on the business abilities and efforts of the developer.
Chatime is not liable for approvals of premises or sites for an outlet, or any other approvals provided to the developer in connection with their operation. This means that while Chatime may offer guidance or approval, the ultimate responsibility for site selection and operational decisions rests with the developer.
Furthermore, Chatime is not liable for the location, design, construction, or renovation of any outlet, or the furnishings, fixtures, and equipment required, even though Chatime retains the right to approve plans and inspect the construction or renovation work. These rights are exercised solely to ensure compliance with the terms and conditions of the agreement, not to guarantee the success of the outlet. Therefore, a prospective Chatime developer should understand that their business acumen and dedication are key factors in determining the success of their Chatime development operation.