What information must Chatime provide to the franchisee if it withholds approval for a proposed site?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Developer must not establish an Outlet without first obtaining the written approval of Franchisor. To obtain approval for a given site, Developer must comply with the process set out in the Operations Manual.
- (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, it must provide the developer with a written notice specifying that approval is withheld and setting out the reasons for withholding approval. This requirement ensures that the developer understands why the proposed site was rejected and what factors influenced Chatime's decision.
This information is crucial for a prospective Chatime developer because it provides transparency in the site selection process. Knowing the reasons behind a site's disapproval allows the developer to adjust their site selection strategy, focusing on locations that better align with Chatime's criteria. It also helps in gathering more relevant information for future site proposals, potentially increasing the chances of approval.
Furthermore, the FDD states that 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 the developer by ensuring a timely decision from Chatime once all necessary information has been provided. The developer should ensure they understand the site selection criteria outlined in the Operations Manual to improve the likelihood of site approval.