Are the Chatime Managing Owner, Operating Manager, and other management personnel required to sign a Confidentiality and Non-Competition Agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (6) The Managing Owner and the Operating manager must attend and complete to Franchisor's satisfaction such training programs as Franchisor prescribes including the initial training referred to in clause 3 (which may be conducted in whole or in part at any place designated by Franchisor).
- (7) You agree to ensure that the Managing Owner, Operating Manager, and any other management personnel of Franchisee shall execute and deliver a Confidentiality and Non-Competition Agreement in the form attached as Exhibit 4. At our request, you will submit to us a copy of all such written agreements. You will ensure that each such person complies with the terms of such agreement during the period that he or she is employed by or associated with your Franchised Business. Any breach of such agreement by any such person will be deemed a breach of this Agreement.
- (8) Unless otherwise provided in this Agreement, any proposed change or replacement of the Operating Manager and Managing Owner must be approved by Franchisor in writing.
- (9) Franchisee agrees to hire and maintain the number and level of additional management personnel, as may be specified by Franchisor from time to time as part of the System Standards for the development and supervision of operation of the Outlet within the Territory in accordance with this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the Managing Owner, Operating Manager, and other management personnel are required to sign a Confidentiality and Non-Competition Agreement. The franchisee must ensure that the Managing Owner, Operating Manager, and any other management personnel execute and deliver this agreement, which is in the form attached as Exhibit 4 to the Franchise Agreement.
Chatime requires that the Managing Owner and Operating Manager attend and complete training programs to the Franchisor's satisfaction. The franchisee must submit a copy of all written agreements upon request and ensure that each person complies with the terms of the agreement during their employment or association with the franchised business. Any breach of the agreement by any such person will be considered a breach of the Franchise Agreement.
Furthermore, when an assignee is a company, those directors and shareholders or other Affiliates of the assignee nominated by Chatime must execute and deliver a confidentiality and non-competition agreement in the form attached as Exhibit 4. This requirement ensures that even in cases of franchise transfer, key individuals associated with the new ownership are bound by confidentiality and non-competition obligations to protect Chatime's interests.