What is the landlord acknowledging regarding existing tenants when leasing to a Chatime store?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- Use Clause. The Leased Premises shall be used solely for the operation of a Chatime Store and identified by the mark Chatime or such other name as may be specified by Franchisor. Landlord acknowledges that such use shall not violate any then-existing exclusive rights granted to any existing tenant of Landlord. Landlord consents to Tenant's use of Franchisor's marks and signs, décor items, color schemes and related components of Franchisor's proprietary system. Landlord further acknowledges that during the term of this Lease or any extension thereof, Landlord will not lease space to another business in the same building, shopping center or facility as the Leased Premises which serves primarily bubble tea or other specialized tea drinks.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, when leasing premises for a Chatime store, the landlord acknowledges that the Chatime store's use of the premises will not violate any existing exclusive rights granted to other tenants of the landlord. This acknowledgement is part of the agreement between the landlord, the tenant (franchisee), and Chatime. The landlord also consents to the franchisee's use of Chatime's trademarks, signs, décor, color schemes, and other proprietary system components.
This provision protects Chatime franchisees from potential conflicts with other tenants in the same building or shopping center. For example, if a landlord has already granted an exclusive right to another tenant to sell coffee, the landlord must ensure that Chatime's operation does not infringe on that right. This helps to avoid legal disputes and ensures that the Chatime franchisee can operate their business without interference from other tenants due to overlapping exclusive rights.
Furthermore, the landlord agrees not to lease space to another business that primarily serves bubble tea or other specialized tea drinks during the term of the lease or any extensions. This provides Chatime with a degree of exclusivity within the building or shopping center, preventing direct competition from similar businesses operating in close proximity. This clause is designed to protect the Chatime franchisee's market share and profitability by limiting the presence of competing bubble tea shops in the same location.