What must a supplier demonstrate to Chatime to be considered for approval to supply Chatime Stores?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
We may grant you approval to obtain food products, supplies, equipment (including point-of-sale and back office computer systems), and materials for your Chatime Store and services to your Chatime Store from other sources as long as they meet our specifications, standards, and requirements. Every supplier must demonstrate that it can meet all System specifications, standards, and requirements and has adequate capacity to supply our franchisees' quantity and delivery needs to our satisfaction. Before approving any supplier, we may take into consideration, without limitation (i) consistency with products or name brands already in the System, (ii) economies of scale achieved by larger volumes, and (iii) certain other benefits that a supplier may offer such as new product development capability. When approving a supplier, we take into consideration the System as a whole; some franchisees may pay higher prices to an approved supplier than they might pay to an unapproved supplier. We may withhold approval of a supplier for any reason. A list of approved suppliers is available on request. Suppliers are required to share
shipping, distribution, and all other relevant information with us.
Our criteria for approving suppliers is not available 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. We currently have exclusive supplier arrangements for some categories of products or services.
You must offer forsale the complete range of approved products. The approved products are listed in the Operations Manual (or as otherwise notified by the Franchisor). You are required to purchase an adequate and balanced quantity of stock of approved products. Inventory/stock requirements will be detailed in the Operations Manual or directly communicated to you. Inventory/stock requirements will be predominantly influenced by historical data and experience across the franchised network. There is an obligation to purchase an inventory of stock for opening the franchised business.
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, a supplier seeking approval to provide goods or services to Chatime stores must demonstrate that it meets all of Chatime's system specifications, standards, and requirements. The supplier must also prove it has the capacity to meet the quantity and delivery needs of Chatime franchisees to Chatime's satisfaction.
Chatime may consider factors such as consistency with existing products or brands within the Chatime system, the economies of scale achievable through larger volumes, and any additional benefits the supplier might offer, such as new product development capabilities. Chatime emphasizes that when evaluating a supplier, it considers the entire system, and franchisees might end up paying higher prices to an approved supplier compared to an unapproved one. Chatime retains the right to withhold approval from a supplier for any reason.
To seek approval, a supplier must submit a written request to Chatime. Chatime may require samples for testing, either by Chatime itself or by an independent laboratory. The requesting party will bear all costs associated with the testing and approval process, regardless of the outcome. The supplier might also need to sign a non-disclosure agreement or provide a performance guarantee. Chatime will notify the applicant of its decision within 30 to 60 days, depending on the nature of the products or services being offered. Chatime can withdraw its approval at any time if the supplier's performance is unsatisfactory, if Chatime changes its specifications, standards, or requirements, or for other reasons. If approval is revoked, Chatime will inform franchisees, who must then cease using that supplier.
It is important to note that Chatime's specific criteria for approving suppliers are not disclosed to franchisees or potential suppliers. Chatime may also limit the number of suppliers it considers for approval and may designate exclusive suppliers for certain product categories. Franchisees are required to purchase an adequate and balanced quantity of stock of approved products, with inventory requirements detailed in the Operations Manual or communicated directly by Chatime.