Under what circumstances is a Chatime Developer required to ensure that their owner managers, directors, shareholders, agents, employees, and any Interested Party enter into a confidentiality agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) If required by Franchisor, Developer must ensure that Developer's Owner managers, directors, shareholders, agents, employees and any Interested Party enter into a confidentiality agreement in a form that is acceptable to Franchisor.
7 Protection of Goodwill
7.1 Acknowledgements and Restriction
Developer Parties acknowledge that:
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a Developer must ensure certain parties enter into a confidentiality agreement under specific circumstances. If required by Chatime, the Developer must ensure that their owner managers, directors, shareholders, agents, employees, and any Interested Party enter into a confidentiality agreement in a form that is acceptable to Chatime.
Additionally, when a Developer seeks to assign their interest in the Development Agreement, the proposed assignee's directors, owners, or other affiliates nominated by Chatime must execute and deliver a confidentiality and non-competition agreement in Chatime's current form. This requirement is part of the conditions that must be satisfied for Chatime to approve the sale or transfer of the Developer's interest.
Furthermore, Chatime requires the Developer to procure that any Interested Party specified by Chatime enters into a noncompete and confidentiality agreement with Chatime. This agreement must contain similar reasonable restraints as those imposed on the Developer and Guarantor, along with confidentiality obligations similar to those outlined in clause 6 of the agreement, as and when required by Chatime. These measures ensure the protection of Chatime's confidential information and goodwill across its network of developers and franchisees.