What renovation and refurbishment obligations does a Chatime Developer have for existing outlets when exercising the option for a new term?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (j) Developer ensures that all Outlets which have been in operations for 5 or more years are renovated and refurbished (including replacing or upgrading any plant, equipment, fixtures, fittings, and signs as Franchisor may reasonably require) in order to bring each such Outlets up to Franchisor's then-current standards and specifications for new Outlets and to comply with any Legal Requirements.
- (k) Franchisor confirming in writing to Developer that each of the conditions in these clauses 2.7(3)(a) to 2.7(3)(j) have been satisfied.
- (4) If the conditions specified in clauses 2.7(3)(a) to 2.7(3)(j) are not satisfied by the parties or waived by Franchisor prior to the expiration date of the Initial Term, then this Agreement will expire on the expiration date of the Initial Term and Franchisor will be free to operate and grant franchises and development rights for Outlets in the Development Area.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a Developer has specific obligations regarding the renovation and refurbishment of existing outlets when seeking to renew their agreement. Specifically, if a Chatime Developer wants to continue operating and enter into a new agreement, they must ensure that all outlets which have been in operation for five or more years are renovated and refurbished.
This renovation and refurbishment includes replacing or upgrading any plant, equipment, fixtures, fittings, and signs. The standard for these renovations is to bring each such outlet up to Chatime's then-current standards and specifications for new outlets. Furthermore, the renovated outlets must comply with any Legal Requirements, defined in the FDD as all applicable laws, ordinances, regulations, rules, administrative orders, decrees, and policies of any government, governmental agency, or department.
This requirement is one of several conditions that must be satisfied for Chatime to confirm in writing that the Developer's option for a new term is approved. Other conditions include paying the Renewal Development Fee, completing any additional required training, executing the Current Multi-Unit Development Agreement, and providing general releases and guaranties as required by Chatime. Failure to meet these conditions, including the renovation requirements, before the expiration of the initial term will result in the agreement expiring, and Chatime being free to grant franchises and development rights to others in the Development Area.