If legal restrictions prevent payment in US dollars, what alternative payment methods might Chatime require?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: Receipts]
5.6 Exchange Controls
- (1) Developer must use its best efforts to obtain any consents or authorizations which may be necessary in order to permit timely payments in Dollars of all amounts payable pursuant to this Agreement.
- (2) If at any time, any legal restriction is imposed upon the purchase of Dollars or the transfer to or credit of a non-resident party with payments in Dollars, Developer must notify Franchisor immediately. While such restrictions are in effect, Franchisor may require payment in any currency designated by Franchisor that is available to Developer or, at Franchisor's option, may require Developer to deposit all amounts due but unpaid as a result of such a restriction in any type of account, in any bank or institution in the Development Area designated by Franchisor. Franchisor will be entitled to all interest earned on such deposits. Franchisor may also elect to receive payment in the form of products or services available to Developer, the value of which will be based on the actual cost of such products or services to Developer. If payment is made in products or services, Developer agrees to deliver such products or services to Franchisor or its designated agent or shipper within the Development Area.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if legal restrictions prevent payment in U.S. dollars, a franchisee must immediately notify Chatime. While these restrictions are in place, Chatime has several options for alternative payment methods.
First, Chatime can require payment in any other currency that Chatime designates and that is available to the franchisee. Second, Chatime can require the franchisee to deposit the amount due into an account at a bank or institution within the Development Area that Chatime designates; Chatime would then be entitled to all interest earned on such deposits. Finally, Chatime can elect to receive payment in the form of products or services available to the franchisee, with the value based on the actual cost of those products or services to the franchisee. If payment is made in products or services, the franchisee must deliver them to Chatime or its designated agent or shipper within the Development Area.
It is important for prospective Chatime franchisees to understand these alternative payment options, as currency restrictions could arise depending on the franchisee's location. Franchisees should be prepared to comply with Chatime's requirements for alternative payment methods to avoid breaching the franchise agreement.