Who is responsible for reimbursing Chatime for costs incurred during the supplier testing and approval process?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
vailable to you or your proposed suppliers. You or the supplier may request approval by submitting a written request to us. We may require that samples from the supplier be delivered to us or to a designated independent testing laboratory for testing prior to approval. All requests will be reviewed in accordance with our then-current procedures and subject to our available resources for review. You or the supplier will be required to reimburse us for all costs that we incur in the testing and approval process whether the supplier is approved or not. The supplier must meet our then-current specifications, standards, and requirements, which may include signing a non-disclosure agreement or a performance guarantee. We may change our specifications, standards, and requirements at any time and there is no limit on our right to do so. If the supplier that you propose is initially approved or disapproved, we will notify you and the supplier within 30 to 60 days depending on the nature of the products or services. We may withdraw our approval at any time if the supplier's performance does not meet our criteria, we change our specifications, standards or requirements, or for other reasons. If an approved supplier's approval is revoked, we will inform you of the revocation and you will cease to use that supplier.
We may limit the number of potential suppliers that we consider for approval. For some categories of products, we may designate a third party or ourselves as an exclusive supplier.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–25)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if a franchisee or a supplier wants to get a new supplier approved, either the franchisee or the supplier is responsible for reimbursing Chatime for all costs incurred during the testing and approval process. This reimbursement is required whether or not the supplier is ultimately approved.
This means that prospective Chatime franchisees do not have the freedom to choose whichever suppliers they want. Chatime maintains control over its supply chain by requiring approval of all suppliers. If a franchisee wants to use a different supplier than those already approved, they will have to go through the approval process, and they will have to pay for it.
This policy ensures that Chatime maintains consistent product quality and protects its brand standards. However, it also means that franchisees may incur additional costs if they wish to explore alternative suppliers. Franchisees should consider this potential expense when evaluating the overall cost of opening and operating a Chatime franchise. It is also important to note that Chatime's criteria for approving suppliers is not available to franchisees or proposed suppliers.