Who is responsible for paying all of Chatime's costs related to the request for consent to transfer the franchise?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor must not unreasonably withhold its consent under clause 13.2(2) if the sale, assignment or other Disposal is of the whole of Franchisee's interest in the Franchise and the Franchised Business and each of the following conditions are satisfied:
- (1) Franchisee establishes to Franchisor's reasonable satisfaction that the proposed assignee (and its Owners and directors if the assignee is a company):
- (a) Possesses the financial resources necessary to conduct and operate the Franchised Business as a franchisee and to service any borrowings it makes in order to acquire The Franchised Business;
- (b) Is a reputable and responsible party and has the business experience and capabilities necessary to operate the Franchised Business successfully; and
- (c) Otherwise meets Franchisor's criteria for the selection of new Chatime franchisees;
- (2) Franchisee pays to Franchisor the Transfer Fee;
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisee is responsible for paying the transfer fee to Chatime when seeking consent to assign the franchise.
Specifically, the franchisee must meet several conditions to obtain Chatime's consent for a sale, assignment, or other disposal of their interest in the franchise. One of these conditions is that the franchisee pays Chatime the transfer fee. The FDD does not specify the exact amount of the transfer fee, but it is a mandatory payment that the franchisee must make to Chatime as part of the transfer process.
This requirement ensures that Chatime is compensated for the administrative and legal costs associated with reviewing and approving the transfer of the franchise to a new owner. It also gives Chatime some control over who becomes a franchisee, as the transfer is contingent on the proposed assignee meeting Chatime's criteria and the franchisee fulfilling their financial obligations.
Prospective franchisees should be aware of this transfer fee and factor it into their financial planning if they anticipate selling their Chatime franchise in the future. They should also inquire about the current amount of the transfer fee and any other potential costs associated with the transfer process to avoid any surprises.