What is Chatime's primary performance obligation under the franchise agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Franchisee agrees that during the Initial Term, it will at all times faithfully, honestly, and diligently perform its obligations under this Agreement to open and operate the Franchised Business at the Premises, and will continuously use its best efforts to promote and enhance the Chatime Network Name.
2.5 Subcontracting
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 franchisee's primary obligation is to faithfully, honestly, and diligently perform their obligations to open and operate the franchised business at the premises. This includes continuously using their best efforts to promote and enhance the Chatime Network Name. This obligation lasts throughout the initial term of the franchise agreement.
This means a Chatime franchisee must actively work to establish and run their store according to the franchise agreement. They must also dedicate themselves to building the Chatime brand. This requires ongoing effort and commitment from the franchisee during the entire term of the agreement.
Furthermore, the agreement is based on the franchisee's direct and exclusive involvement in the business. The franchisee cannot sub-franchise, sublicense, subcontract, share, divide, or partition rights under the agreement without Chatime's prior written consent. Chatime may withhold such consent at its discretion. This highlights the importance of the franchisee's personal involvement and active management in the Chatime business.