What is the maximum lease term Chatime will allow for a new approved location?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, if the lease term for a new approved location extends beyond the remaining term of the Franchise Agreement, then Franchisor shall extend the Franchise Agreement to align with the end date of the new lease for the new location, and Franchisee shall pay Franchisor a pro rata portion of the then-current New Outlet Fee based on the length of the extension of the term of the Franchise Agreement, provided that the lease term for any new approved location shall not exceed ten years.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the maximum lease term for a new approved location is ten years. If the lease term for a new approved Chatime location extends beyond the remaining term of the Franchise Agreement, Chatime will extend the Franchise Agreement to align with the end date of the new lease.
However, the franchisee is responsible for paying Chatime a pro rata portion of the then-current New Outlet Fee. This fee is based on the length of the extension of the term of the Franchise Agreement.
This policy ensures that Chatime franchisees can secure suitable locations with longer lease terms if needed, but it also requires them to compensate Chatime for the extended franchise period. Prospective franchisees should consider this potential cost when negotiating lease terms and evaluating the financial implications of extending their Franchise Agreements.