If Chatime withholds approval for a proposed site, what must Chatime specify?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Subject to a reasonable belief by Franchisor that Developer will meet all requirements under clause 4.4, Franchisor must provide its approval or non-approval to the proposed Site within 30 days after receiving all the information required by Franchisor. When Franchisor does not approve a proposed Site, it must provide to Developer a written notice:
- (a) Specifying that approval is withheld; and
- (b) Setting out why approval is withheld. If any additional information is requested by Franchisor in respect of a proposed Site, the 30 days will begin upon the date of receipt of any such additional information.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if Chatime does not approve a proposed site for a new outlet, they must provide the developer with written notice. This notice must explicitly state that approval is being withheld. Additionally, the notice must detail the reasons behind the decision to withhold approval.
This requirement ensures that the developer understands why their proposed site was rejected, allowing them to address any concerns or adjust their site selection strategy accordingly. It also promotes transparency in the site approval process, which is crucial for maintaining a healthy franchisor-franchisee relationship.
Furthermore, if Chatime requests additional information regarding a proposed site, the 30-day period for approval or non-approval begins upon receipt of this additional information. This clause protects Chatime, ensuring they have adequate time to evaluate the site once all necessary details are available.