Regarding Chatime's approved suppliers, what must a developer do?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
4.5 Products and Supply Arrangements
- (1) Developer must establish and maintain supply arrangements on competitive terms and conditions for Products, the shop-fitting and signage of Outlets and equipment to be sold by or used in the operation of Outlets. Such suppliers will be subject to Franchisor's prior written approval and, upon approval, will be deemed to be Approved Suppliers. Franchisor may, at any time and in its discretion, revoke its approval of any Approved Supplier. Franchisor may itself be an Approved Supplier.
- (2) Developer acknowledges that Franchisor may from time to time vary the range of Products.
- (3) Approval of a supplier by Franchisor may be conditional on the supplier meeting Franchisor's quality and standards requirements. Franchisor may require any supplier applying for approval to allow Franchisor to inspect the proposed supplier's facilities to assist Franchisor in determining if the proposed supplier meets Franchisor's criteria.
- (4) Unless otherwise provided in writing by Franchisor, Developer must purchase all Raw Materials sold in the Outlets from Franchisor on the then-current Terms of Trade. Otherwise, Developer must purchase all Raw Materials from suppliers approved by Franchisor in writing.
- (5) Developer must ensure that all Raw Materials and other Products and equipment used in the operation of Outlets comply with the System Standards.
- (6) Franchisor or its Affiliates may receive payments from Approved Suppliers on account of such suppliers' dealings with Developer or Franchisees and may use all amounts so received without restriction and for any purpose Franchisor or its Affiliates deem appropriate (unless Franchisor or its Affiliates agree otherwise with the supplier).
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a developer must establish and maintain supply arrangements on competitive terms for products, shop-fitting, signage, and equipment used in the operation of outlets. These suppliers are subject to Chatime's prior written approval and, once approved, are considered "Approved Suppliers." Chatime retains the right to revoke approval of any supplier at its discretion and may itself be an approved supplier.
Chatime's approval of a supplier may depend on the supplier meeting the franchisor's quality and standards. Chatime may require suppliers seeking approval to allow inspection of their facilities to determine if they meet Chatime's criteria. Unless otherwise provided in writing by Chatime, a developer must purchase all raw materials sold in the outlets from Chatime based on the current Terms of Trade. Otherwise, the developer must purchase all raw materials from suppliers approved by Chatime in writing.
The developer must ensure that all raw materials, other products, and equipment used in the operation of the outlets comply with the System Standards. Chatime or its affiliates may receive payments from approved suppliers based on the suppliers' dealings with the developer or franchisees and may use these amounts without restriction for any purpose they deem appropriate, unless otherwise agreed with the supplier.