Are there any examples of 'Collateral Agreements' that Chatime franchisees might enter into?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
le;
- (b) Meets Franchisor's standards and specifications;
- (c) Operates under the Marks and the System; and
- (d) Is operated pursuant to a valid franchise agreement.
- (12) Collateral Agreement means any agreement between Franchisor and Franchisee or any agreement between Franchisee and an Affiliate of Franchisor in connection with this Agreement and The Franchised Business.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a 'Collateral Agreement' refers to any agreement between Chatime and a franchisee, or between the franchisee and an affiliate of Chatime, that is connected to the Franchise Agreement and the franchised business.
The document states that franchisees must adhere to all the terms and conditions outlined in any Collateral Agreement. Furthermore, any violation of a Collateral Agreement is considered a breach of the primary Franchise Agreement.
While the FDD defines what a Collateral Agreement is, it does not provide specific examples of what these agreements might be. It is important for prospective franchisees to understand the potential scope and content of any Collateral Agreements they may be required to sign, as these agreements carry the same weight and consequences as the main Franchise Agreement. A prospective franchisee should ask Chatime for a list of all potential collateral agreements.