Is Chatime responsible for the acts or omissions of any person involved in the design of any Outlet?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee alters the Site and removes or changes any signs, fixtures, fittings, colors, and layout as reasonably requested by Franchisor to ensure that the appearance of the Site cannot be confused with the then-prevailing image for an Outlet or to be in any way associated with Franchisor.
4.11 Construction of the Outlet
(1) Franchisee is responsible for the construction and development of the Outlet in accordance with the System Standards. All plans and specifications for the Outlet must, if required by Franchisor, be approved by Franchisor.
(2) Franchisee must use Franchisor's approved suppliers for real estate and construction management services, construction due diligence, architectural, engineering and design services, construction permit acquisition and management services, and construction site visits, in connection with the construction and development of the Outlet. All construction of the Outlet under this Agreement must be undertaken by competent and licensed building contractors and subcontractors.
(3) Franchisor may, in its sole discretion, approve or not approve an application for designing the interior and exterior of the Outlet.
(4) In the construction of the Outlet in the Territory, Franchisee must ensure that it complies with:
(a) Franchisor's System Standards in relation to the construction of the Outlet; and
(b) All Legal Requirements, including applicable ordinances, building codes and permit requirements and with lease requirements and restrictions.
(5) Franchisee must obtain Franchisor's written approval of any material revision or adaptation of Franchisee's plans and specifications, previously approved by Franchisor (Approved Plans). Franchisor must approve or disapprove any changes to the Approved Plans within 10 Business Days from receipt of the proposed changes.
If Franchisor approves any revision or adaptation of the construction plans and specifications, upon completion of construction, Franchisee must provide Franchisor with a set of "as built" plans and specifications.
4.12 Acknowledgment
Franchisee acknowledges that Franchisor has the right, but no obligation, to approve architects and other design and construction professionals to help ensure consistency, uniformity, and quality with the System and the Chatime image.
4.13 Franchisor's Inspection Rights
Franchisor, its Affiliates, consultants, and agents have the right to inspect the Outlet and the construction work from time to time during the course of construction to verify the progress of construction and Franchisee's compliance with the terms of this Agreement.
4.14 Point of Sale System
- (1) Franchisee must use a point of sale system and related technology systems nominated or approved by Franchisor. The supplier of the point of sale system and related technology systems must be approved by Franchisor*.*
- (2) Franchisee must ensure that connectivity at the Outlet is maintained and available at all times to allow all data generated by the point of sale system to be captured by Franchisor's central polling server.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisee bears the responsibility for the construction and development of their Chatime outlet, ensuring it aligns with the brand's System Standards. While Chatime retains the right to approve or disapprove the outlet's design, the franchisee is obligated to use Chatime's approved suppliers for services such as real estate, construction management, architectural design, and permit acquisition. Furthermore, the franchisee must ensure that construction is carried out by licensed contractors and subcontractors.
Chatime has the right to inspect the outlet during construction to ensure compliance with the franchise agreement. The franchisee must also obtain Chatime's written approval for any significant changes to the approved construction plans. Upon completion, the franchisee is required to provide Chatime with a set of "as built" plans and specifications.
Chatime states it has the right, but not the obligation, to approve architects and other design and construction professionals. The franchisee is required to indemnify Chatime against losses, liabilities, and costs arising from any negligent act or omission by the franchisee, their employees, agents, or contractors. This includes any injury or loss of property on the premises.
Therefore, Chatime does not assume liability for the acts or omissions of design and construction professionals, as the franchisee is responsible for construction, must use approved suppliers, and must indemnify Chatime against any related liabilities.