What is the length of the 'New Term' for a Chatime franchise?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Franchisor grants to Franchisee the option to:
(a) Operate as Franchisee in the Territory; and
(b) Enter into a new franchise agreement with Franchisor (based on Franchisor's thencurrent franchise agreement), for the New Term subject to the conditions set out in these clauses 2.6(1) to 2.6(4) (the Option).
(2) Franchisee must notify Franchisor in writing of its intention to exercise the Option not more than 12 Months and not less than 8 Months prior to the end of the Initial Term.
(3) Franchisee's Option pursuant to clause 2.6(2) is subject to all of the following conditions being satisfied:
(a) Franchisee has substantially complied with all material provisions of this Agreement throughout the Initial Term.
(b) At the date of giving Franchisor notice of its intention to exercise the Option and as at the end of the Initial Term, there is no outstanding breach of this Agreement or any Collateral Agreement which has not been remedied.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
The 2025 Chatime Franchise Disclosure Document does not specify the exact length of the 'New Term' for a franchise agreement. However, it does state that the franchisee has the option to enter into a new franchise agreement with Chatime for the 'New Term'.
To exercise this option, the franchisee must notify Chatime in writing between 8 and 12 months before the end of the initial term. The option is contingent upon the franchisee having substantially complied with all material provisions of the existing agreement and not being in outstanding breach of any agreements.
Prospective franchisees should ask Chatime for the specific duration of the 'New Term' and review the then-current franchise agreement to fully understand the terms and conditions applicable to the renewal period. This information is crucial for long-term business planning and financial forecasting.