If the assignee of a Chatime franchise is a company, what documents must the directors and shareholders or other Affiliates nominated by the Franchisor execute and deliver?

According to Chatime's 2025 Franchise Disclosure Document, if a Chatime franchisee seeks to assign their franchise to a company, certain individuals associated with the assignee company must execute specific documents. Specifically, those directors and shareholders or other Affiliates of the assignee nominated by Chatime must fulfill certain obligations.

These nominated individuals must execute and deliver a personal guarantee and indemnity, undertaking similar personal restraints to those given by the original guarantor under the franchise agreement. This guarantee must be in favor of Chatime and in the form attached as Exhibit 3 to the Franchise Disclosure Document. They must also execute and deliver a confidentiality and non-competition agreement, using the form attached as Exhibit 4.

Furthermore, these individuals must execute the new franchise agreement or assignment in their personal capacities. This requirement ensures that key individuals within the assignee company are personally bound by certain obligations and restrictions, providing Chatime with additional security and recourse in the event of a breach of the franchise agreement or confidentiality obligations. This is a fairly standard practice in franchising to ensure the franchisor has recourse to individuals, not just a corporate entity.