Under which article of the Chatime Franchise Agreement are non-competition covenants outlined?

According to Chatime's 2025 Franchise Disclosure Document, Article 9 of the Franchise Agreement outlines the non-competition covenants for franchisees. Non-competition covenants are legal restrictions that prevent a franchisee from engaging in similar business activities during the term of the franchise agreement and for a specified period after the agreement ends. These covenants are designed to protect Chatime's market share, trade secrets, and customer relationships.

For a prospective Chatime franchisee, this means that Article 9 of the Franchise Agreement will detail the specific terms of the non-competition agreement. This includes the geographic area in which the franchisee is restricted from operating a competing business, the duration of the restriction, and the types of activities that are prohibited. It is essential for franchisees to carefully review and understand these terms before signing the agreement, as violating the non-competition covenants can result in legal action and financial penalties.

In addition to the Franchise Agreement, the Multi-Unit Development Agreement (MDA) also contains non-competition covenants, which are outlined in Articles 7 and 15. This is relevant for franchisees who plan to develop multiple Chatime locations. These franchisees should pay close attention to the terms in both the Franchise Agreement and the MDA to fully understand their obligations. Franchisees should seek legal counsel to fully understand the implications of these covenants and how they may affect their future business opportunities.