Can the Chatime Franchisor vary the terms of the Offer Notice in the Acceptance Notice?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) The Acceptance Notice may contain terms which vary the terms of the Offer Notice so long as the terms upon which Franchisor agrees to buy the Business are not commercially less favorable to Franchisee than those contained in the Offer Notice. For example, if the consideration, terms, and/or conditions offered by a third party are such that Franchisor is not reasonably able to furnish the same types of consideration, terms, and/or conditions, then Franchisor may purchase the interests proposed to be transferred for the reasonable equivalent in cash.
- (5) If Franchisee receives the Acceptance Notice during the Offer Period Franchisee must sell
and Franchisor must purchase the Business upon the terms and conditions contained in the Offer Notice as may be varied by the Acceptance Notice.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime may vary the terms of the Offer Notice in the Acceptance Notice. Specifically, Chatime's Acceptance Notice can include varied terms from the franchisee's Offer Notice, provided that the new terms are not commercially less favorable to the franchisee.
For example, if a third party offers consideration, terms, or conditions that Chatime cannot reasonably match, Chatime can offer the reasonable equivalent in cash to purchase the interests proposed for transfer. This ensures Chatime has the flexibility to respond to third-party offers while protecting the franchisee's financial interests.
If the franchisee receives the Acceptance Notice with the varied terms during the Offer Period, the franchisee is obligated to sell, and Chatime is obligated to purchase the business under the terms and conditions as modified by the Acceptance Notice. This clause ensures that both parties are clear on the conditions of the sale if Chatime exercises its right to purchase the franchise back.