Has any party associated with the Chatime franchise been convicted of a felony within the ten-year period immediately preceding the application for registration?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following is added at the end of Item 3:
Except as provided above, with regard to the franchisor, its predecessor, a person identified in Item 2, or an affiliate offering franchises under the franchisor's principal trademark:
- A. No such party has an administrative, criminal, or civil action pending against that person alleging a felony, a violation of a franchise, antitrust, or securities law, fraud, embezzlement, fraudulent conversion, misappropriation of property, unfair or deceptive practices, or comparable civil or misdemeanor allegations.
- B. No such party has pending actions, other than routine litigation incidental to the business, which are significant in the context of the number of franchisees and the size, nature, or financial condition of the franchise system or its business operations.
- C. No such party has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the ten-year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging violation of a franchise, antifraud, or securities law, fraud; embezzlement, fraudulent conversion or misappropriation of property, unfair or deceptive practices, or comparable allegations.
- D. No such party is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a federal, state, or Canadian franchise, securities, antitrust, trade regulation, or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency, is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange, or is subject to a currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, Item 3 includes an addition that addresses administrative, criminal, and civil actions involving the franchisor, its predecessors, individuals identified in Item 2, or affiliates offering franchises under the Chatime trademark. Specifically, it states that no such party has been convicted of a felony or pleaded nolo contendere to a felony charge. Furthermore, within the ten-year period immediately preceding the application for registration, none of these parties has been convicted of or pleaded nolo contendere to a misdemeanor charge or been the subject of a civil action alleging violation of franchise, antifraud, or securities law, fraud, embezzlement, fraudulent conversion or misappropriation of property, unfair or deceptive practices, or comparable allegations.
This statement assures prospective Chatime franchisees that the key individuals and entities associated with the franchise have not been involved in significant legal issues that could impact the franchise system. The absence of felony convictions or significant civil actions within the specified timeframe suggests a stable and legally compliant leadership.
It is important for potential franchisees to carefully review Item 2 and other relevant sections of the FDD to fully understand the background and affiliations of the individuals and entities covered by this statement. While this clause provides some reassurance, franchisees should still conduct their own due diligence to assess the risks and benefits of investing in a Chatime franchise.