Can Chatime make approval of a supplier conditional on meeting certain quality and standards requirements?

According to Chatime's 2025 Franchise Disclosure Document, Chatime can make the approval of a supplier conditional on meeting certain quality and standards requirements. Specifically, the FDD states that approval of a supplier by Chatime may be conditional on the supplier meeting Chatime's quality and standards requirements. Chatime may also require any supplier applying for approval to allow Chatime to inspect the proposed supplier's facilities to assist Chatime in determining if the proposed supplier meets Chatime's criteria.

This conditionality ensures that all products used in Chatime franchises meet the brand's standards, maintaining consistency and quality across all locations. For a prospective franchisee, this means they cannot freely choose suppliers but must use those approved by Chatime, and these suppliers must adhere to Chatime's quality benchmarks.

Furthermore, if a franchisee wants to propose a new supplier, they must provide samples, information, and documentation about the supplier and its products. They must also allow Chatime to inspect the supplier's facilities and cover all costs associated with the evaluation, including out-of-pocket expenses, compensation for time spent, and overhead expenses. This process ensures that any new supplier meets Chatime's standards before being approved.

This requirement is fairly standard in franchising, as franchisors need to protect their brand's reputation by ensuring consistent product quality. While it limits a franchisee's autonomy in choosing suppliers, it also provides assurance that the products they use will meet the standards expected by Chatime customers.