If a Chatime franchisee requests approval of a new alternate supplier, what information and documentation must they provide to the Franchisor?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) If Franchisee requests approval of a new alternate supplier, Franchisee shall provide Franchisor with samples of the proposed alternate supplier's product, all information and back-up documentation requested by Franchisor concerning the proposed alternate supplier and its products, and access to inspect the proposed alternate supplier's production facilities, and Franchisee shall pay Franchisor for all of its costs and expenses in evaluating and deciding upon the request, including without limitation out of pocket expenses, compensation for the time spent evaluating the request, and overhead expenses.
- (3) Approval of a supplier by Franchisor may be conditional on the supplier meeting Franchisor's quality and standards requirements. Franchisor may require any supplier applying for approval to allow Franchisor to inspect the proposed supplier's facilities to assist Franchisor in determining if the proposed supplier meets Franchisor's criteria.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a franchisee seeking approval for a new supplier must provide several items to Chatime for consideration. Specifically, the franchisee needs to submit samples of the proposed supplier's products, all information and documentation requested by Chatime concerning the potential supplier and their products, and access for Chatime to inspect the supplier's production facilities.
Furthermore, the Chatime franchisee is responsible for covering all costs and expenses incurred by Chatime in evaluating the supplier request. These expenses include, but are not limited to, out-of-pocket expenses, compensation for the time spent by Chatime evaluating the request, and overhead expenses. This financial responsibility means the franchisee bears the risk of the supplier not being approved after Chatime has incurred costs to evaluate the supplier.
Chatime's approval of a supplier may be conditional on the supplier meeting Chatime's quality and standards requirements. Chatime may also require any supplier applying for approval to allow Chatime to inspect the supplier's facilities to assist in determining if the proposed supplier meets Chatime's criteria. This ensures that all suppliers meet the brand's standards for quality and consistency.
This process ensures Chatime maintains control over its supply chain and product quality, but it also places a financial burden and administrative requirements on the franchisee who wishes to explore alternative suppliers. Franchisees should carefully consider these costs and requirements before pursuing a new supplier relationship.