What rights are granted to a Chatime franchisee upon execution of the Franchise Agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
We offer franchises to qualified persons to own and operate food service businesses offering gourmet coffees and teas, other coffee and tea-based beverages, bubble tea, compatible food products, coffee and tea makers, and related supplies, accessories, and gifts at a specified location within a designated geographic territory (a "Territory"). If we grant you a franchise, you will execute our standard form of Chatime Franchise, LLC Franchise Agreement attached as Exhibit B (the "Franchise Agreement") and be granted the right to develop and operate one Chatime Store.
We also offer multi-unit development agreement franchises to qualified persons who must establish certain minimum numbers of Chatime Stores within a designated geographic territory (a "Development Territory"). If we grant you a multi-unit development agreement franchise, you will execute our standard form of multi-unit development agreement attached as Exhibit C (the "Multi-Unit Development Agreement") and be granted the right to begin opening Chatime Stores in your Development Territory (the "Development Rights"). Your master franchise business includes the obligation to open a certain number of Chatime Stores in your Development Territory in accordance with a specified schedule (the "Development Quota"). Upon establishing each additional outlet under the Multi-Unit Development Agreement, you will be required to sign our then-current Franchise Agreement, which may differ from the current Franchise Agreement included with this Franchise Disclosure Document. If you fail to meet your Development Quota or fail to comply with any financial obligation relating to the Development Rights, we may terminate your Development Rights, reduce or eliminate your Development Territory or the territorial protections provided under your Multi-Unit Development Agreement, or take other action we deem appropriate in our discretion.
We may periodically make changes to the System including, without limitation, our menu, operating standards, and facility, signage, equipment, and fixture requirements. You may need to make additional investments if we make System changes or if your Chatime Store's equipment or facilities become worn or obsolete, or for other reasons (for example, to comply with changes to applicable laws or regulations). Your Chatime Store must be developed and operated to our
specifications and standards. Uniformity of products sold in Chatime Stores is important to the overall integrity and reputation of the System; accordingly, you have no discretion regarding the products sold or other System standards.
You must execute the Acknowledgment Addendum attached as Exhibit F before your Franchise Agreement becomes effective.
Source: Item 1 — The Franchisor, and Any Parents, Predecessors, and Affiliates (FDD pages 6–9)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, upon executing the standard Franchise Agreement, a franchisee is granted the right to develop and operate one Chatime store at a specified location within a designated geographic territory. This territory is referred to as "Territory".
Chatime also offers multi-unit development agreement franchises to qualified individuals. These franchisees are granted "Development Rights" to begin opening Chatime stores within a designated "Development Territory." These franchisees must establish a minimum number of Chatime stores according to a specified schedule, known as the "Development Quota." Upon establishing each additional outlet under the Multi-Unit Development Agreement, the franchisee will be required to sign the then-current Franchise Agreement, which may differ from the current Franchise Agreement included with the Franchise Disclosure Document.
It's important to note that Chatime may periodically make changes to the System, including the menu, operating standards, and facility requirements. Franchisees may need to make additional investments to comply with these changes or if their store's equipment becomes obsolete. Franchisees must also adhere to Chatime's specifications and standards, with no discretion regarding the products sold or other System standards. Additionally, the Acknowledgment Addendum attached as Exhibit F must be executed before the Franchise Agreement becomes effective.