What standards must a Chatime franchisee conform to?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ctions on Sources of Products and Services**
The System's reputation and goodwill are based upon the sale of high-quality products and the provision of high-quality service. You will conform to ourstandards of quality, safety, cleanliness, appearance and service. We anticipate that ourstandards will change over time, and you will adhere to these changes.
You must operate all aspects of your Chatime Store in strict conformance with the methods, standards and specifications of our System. Our methods, standards, and specifications will be communicated to you in writing through our confidential Operations Manual and other proprietary guidelines and writings that we prepare for your use in connection with the Chatime Store and System. We may periodically change our System standards and specifications from time to time,as we deem appropriate or necessary in our sole discretion, and you will be solely responsible for costs associated with complying with any modifications to the System.
You may only market, offer, sell and provide the approved products and services at your Chatime Store in a manner that meets our System standards and specifications. We will provide you with a list of our then-current approved products and services, along with their standards and specifications, as part of the Operations Manual or otherwise in writing prior to the opening of your Chatime Store. We may update or modify this list in writing at any time.
If you wish to offer any product or service in your Chatime Store other than our approved Products and services, or use any item in connection with your Chatime Store that does not meet our System standards and specifications, then you must obtain our prior written approval as described more fully in this Item.
We have the right to require you to purchase any items or services necessary to establish and operate your Chatime Store from a supplier that we approve or designate, which may include us
or one of our affiliates. You are required to purchase our then designated point of sale system and associated operating technology stack from an approved supplier. We will provide you with a list of our approved suppliers in writing as part of the Operations Manual or otherwise in writing, and we may update or modify this list as we deem appropriate.
We currently require that you maintain the following insurance coverages: A) general liability coverage with minimums of $1 million per occurrence, $2 million general and products/completed operations aggregate, $1 million personal/advertising injury, $50,000 rented premises damage, and $5,000 medical expenses; B) franchisee commercial auto insurance with a $1 million combined single limit; C) workers compensation insurance with coverage limits of $1 million for bodily injury by disease per accident, $1 million policy limit, and $1 million per employee, regardless of state laws and cannot exclude owner-operators; D) property/business interruption coverage business personal property, tenant improvements, equipment, business interruption, and franchisor royalties, for a minimum of 12 months' actual loss sustained; E) cyber liability insurance with minimum coverage limits of $250,000 per occurrence and $250,000 aggregate; F) employment practices liability insurance with minimum coverage limits of $500,000 per occurrence and $500,000 aggregate, which includes third party liability and wage & hour coverage of at least $25,000, with a maximum deductible that does not exceed $25,000; and G) crime insurance with a minimum coverage of $100,000 for each claim.
We have the right to require you to purchase any items or services necessary to operate your Chatime Store. Currently, we have approved suppliers for the following items: (i) food products and ingredients; (ii) real estate and construction management services; (iii) construction due diligence (unless proposed site does not require such due diligence); (iv) architectural, engineering and design services related to the establishment of your Chatime Store; (v) construction site visits; (vi) signage; (vii) furniture and equipment that must be used in connection with the operation of the Chatime Store; (viii) technology set-up and ongoing services; (viii) branded and proprietary ingredients, inventory and supplies; (ix) payroll and rostering services; (x) human resource services; and (xi) initial local marketing and location launch events. Certain food products that easily spoil (e.g., fresh fruits and milk) may be purchased by you locally with our prior approval.
Our current approved supplier for construction services is Build'M, our approved suppliers for real estate services are Morrow Hill, RE Image, Franreel and Great Earth Realty, and our approved supplier for initial marketing activities is Slique Media.
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, franchisees must adhere to standards regarding quality, safety, cleanliness, appearance, and service. These standards are put in place to protect the System's reputation and goodwill. Chatime anticipates that these standards will change over time, and franchisees are expected to adhere to these changes. Franchisees must operate all aspects of their Chatime store in strict conformance with the methods, standards, and specifications of the Chatime system, as communicated in writing through the confidential Operations Manual and other proprietary guidelines. Chatime may periodically change these standards and specifications, and franchisees are solely responsible for the costs associated with complying with any modifications to the system.
Chatime franchisees are required to market, offer, sell, and provide only the approved products and services at their stores in a manner that meets Chatime's system standards and specifications. A list of approved products and services, along with their standards and specifications, will be provided as part of the Operations Manual or in writing prior to the store's opening. This list may be updated or modified in writing at any time. If a franchisee wishes to offer any product or service other than the approved ones, they must obtain prior written approval from Chatime.
Chatime also requires franchisees to purchase or lease all products, ingredients, goods, supplies, equipment, inventory, insurance, payroll service, real estate and project management services, and accounting services from Chatime or one of its approved suppliers, which may include Chatime affiliates. Chatime estimates that required purchases from approved suppliers will represent approximately 85% of the total purchases for establishing and operating a Chatime store. Franchisees are also required to maintain specific insurance coverages, including general liability, commercial auto, workers compensation, property/business interruption, cyber liability, employment practices liability, and crime insurance, with varying minimum coverage limits.
Prospective franchisees should note that Chatime's criteria for approving suppliers are not available to them or their proposed suppliers. To become an approved supplier, a written request must be submitted to Chatime, and samples may be required for testing at an independent laboratory. The franchisee or supplier will be responsible for reimbursing Chatime for all costs incurred in the testing and approval process, regardless of whether the supplier is approved. Chatime may change its specifications, standards, and requirements at any time, and there is no limit on its right to do so. Chatime may also limit the number of potential suppliers considered for approval and may designate exclusive suppliers for some categories of products.