If a Chatime franchisee answers 'no' to understanding the non-compete covenants, are they required to provide a comment?

According to the 2025 Chatime Franchise Disclosure Document, if a franchisee answers 'no' to understanding the non-compete covenants, they are required to provide a comment. The table included in Item 23 provides a checklist of items related to statements or promises regarding the costs involved in operating a franchise. One of the items states, 'Do you understand that that we and our affiliates have the right to issue franchises or operate competing businesses for or at locations, as we determine, as described in the Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please comment:' This indicates that if a prospective franchisee does not understand this aspect of the agreement, they must provide a comment to elaborate on their lack of understanding.

This requirement ensures that the franchisee acknowledges and understands Chatime's right to issue franchises or operate competing businesses. By requiring a comment, Chatime aims to ensure that the franchisee is fully aware of the competitive landscape they may encounter. This also provides an opportunity for the franchisee to seek clarification on any aspects of the non-compete covenants they find unclear.

For a prospective Chatime franchisee, this means carefully reviewing the non-compete covenants in the Franchise Agreement and Franchise Disclosure Document. If any part of these covenants is unclear, the franchisee should mark 'no' and use the comment section to articulate their specific questions or concerns. This proactive approach can help avoid misunderstandings and ensure that the franchisee enters the agreement with a clear understanding of their rights and obligations.