During the Restraint Period, is a Chatime franchisee prohibited from employing any person who was an employee, independent contractor, or prospective franchisee of Chatime within the 12 months prior to such action?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) procure, employ, seek to employ or engage, or appoint in any capacity (whether as a consultant, director or otherwise), any person who is or has been in the 12 months prior to such action an employee or independent contractor of the Franchisor or any Chatime Store Business
during the Restraint Period in the Restraint Area.
(58) Restrained Business means a business which is the same as or substantially similar to the Franchised Business, or engaged, concerned or interested in or carrying on any retailing or supplying of products or services the same as or substantially similar to the Products or Services offered by the Franchised Business or other Chatime Store Businesses.
(59) Restraint Period means a continuous uninterrupted period of two (2) years commencing on and from the expiration or termination date of this Agreement.
(57) Restraint Area means (a) the Territory, (b) any area within twenty five (25) miles from any Outlet operated by Franchisee, and (c) any area within twenty five (25) miles of any Chatime Store.
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- RCW §49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor, or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the Franchise Agreement or elsewhere are void and unenforceable in Washington.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a franchisee is restricted from employing or engaging anyone who has been an employee or independent contractor of Chatime or any Chatime store business within the 12 months before such employment during the Restraint Period. This restriction extends to various capacities, including employment as a consultant or director.
The Restraint Period for Chatime is defined as a continuous, uninterrupted period of two years, starting from the expiration or termination date of the Franchise Agreement. The Restraint Area includes the franchisee's territory, any area within twenty-five miles of any outlet operated by the franchisee, and any area within twenty-five miles of any Chatime store.
This non-employment clause is designed to protect Chatime's interests by preventing franchisees from poaching talent or resources that could be used to compete with the brand. However, in Washington state, the FDD states that franchisors are prohibited from restricting franchisees from soliciting or hiring any employee of a franchisee of the same franchisor, or soliciting or hiring any employee of the franchisor. Therefore, any such provisions contained in the Franchise Agreement are void and unenforceable in Washington.