Can Chatime offer and sell franchising rights to Multi-Unit Developers who are located outside the franchisee's territory?

According to Chatime's 2025 Franchise Disclosure Document, Chatime retains the right to offer and sell franchising rights to Multi-Unit Developers who are located outside of a franchisee's designated territory or development area. This means that Chatime is not restricted from expanding its franchise network by offering opportunities to developers in different regions, regardless of existing franchisees' territories.

For a prospective Chatime franchisee, this clause indicates that their territory is not protected from the franchisor's expansion strategies. Chatime can recruit multi-unit developers from outside the franchisee's territory to develop stores, potentially increasing competition in the general market area. This could impact the franchisee's business if the new locations draw customers away or saturate the market.

This practice is relatively common in the franchise industry, as franchisors often seek to grow their brand presence as quickly as possible. However, it's crucial for franchisees to understand the implications of this clause and how it might affect their business operations and revenue potential. Prospective franchisees should consider the potential for increased competition and factor it into their business planning and financial projections.