Is Chatime permitted to subcontract its obligations within the Territory under the Franchise Agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement is predicated on the ongoing, direct, and exclusive involvement of Franchisee in the Franchised Business. No person other than an employee of Franchisee or a professional or other advisor appointed on normal commercial terms is to be involved in the Franchised Business without the prior written consent of Franchisor. In addition, Franchisee must not sub-franchise, sublicense, subcontract, share, divide, or partition rights under this Agreement without Franchisor's prior written. Franchisor may in its absolute discretion withhold such consent.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchise agreement is based on the franchisee's direct and exclusive involvement in the franchised business. The franchisee cannot sub-franchise, sublicense, subcontract, share, divide, or partition rights under the agreement without Chatime's prior written consent, which Chatime may withhold at its discretion.
This means that a Chatime franchisee is expected to be actively involved in the day-to-day operations of their store. They cannot simply delegate their responsibilities to another party without explicit approval from Chatime. This requirement ensures that the franchisee is committed to maintaining the standards and quality of the Chatime brand.
However, the agreement does allow for the involvement of employees of the franchisee or professional advisors appointed on normal commercial terms. This allows the franchisee to hire staff and seek expert advice when needed, but it prevents them from completely outsourcing their obligations under the franchise agreement. This is a fairly standard clause in franchise agreements, designed to protect the brand and ensure consistent operation across all locations.