What training obligations does a Chatime Developer have when exercising the option for a new term?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
nt. Any unpermitted grant shall be null and void.
2.7 Option for New Term
- (1) Franchisor grants to Developer the option to:
- (a) Operate as Developer in the Development Area; and
- (b) Enter into a new development business agreement with Franchisor (based on Franchisor's then-current multi-unit development business agreement),
for the New Term subject to the conditions set out in these clauses 2.7(1) to 2.7(4) (Option).
- (2) Developer must notify Franchisor in writing of its intention to exercise the Option not more than 12 Months and not less than 8 Months prior to the end of the Initial Term.
- (3) The Option is subject to all of the following conditions being satisfied:
- (a) At the time of notifying Franchisor of its intention to exercise the Option, Developer delivers to Franchisor in writing a proposed development schedule (Revised Development Schedule) for the New Term.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
Based on the 2025 Chatime Franchise Disclosure Document, a Chatime Developer who wishes to exercise the option for a new term does not have specific, enumerated training obligations. However, the FDD states that to be eligible for a new term, the Developer must substantially comply with all material provisions of the existing agreement throughout the initial term and have remedied any outstanding breaches of the agreement or any collateral agreements.
While there are no explicit training requirements mentioned for the option's renewal, Chatime may require the Developer's Operating Manager to attend and successfully complete training programs as deemed necessary by Chatime from time to time. This suggests that ongoing training for the Operating Manager is a condition of maintaining compliance with the franchise agreement, which is a prerequisite for exercising the option for a new term. The Operating Manager is responsible for the day-to-day operation of the Chatime store and must devote at least 38 hours per week to these operations, ensuring proper customer service levels.
Therefore, while not directly stated as a condition for the new term option, maintaining up-to-date training for the Operating Manager is crucial for the Developer to remain compliant with the franchise agreement. A prospective Chatime Developer should clarify with the franchisor what specific training programs or certifications are required for the Operating Manager, both initially and on an ongoing basis, to ensure they meet the standards for compliance and are eligible to renew their agreement.