Under what circumstances must a Chatime franchisee provide details of the owners of the franchisee to Chatime, including the number and class of ownership interests held?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
19.3 Directorship and Ownership of Franchisee
Franchisee:
- (1) Warrants that the Owners, directors and officers of Franchisee as at the date of execution are as notified to Franchisor by Franchisee; and
- (2) Must provide to Franchisor immediately upon request details of the Owners of Franchisee, including the number and class of Ownership Interests held by each Owner as of:
- (a) The date of execution of this Agreement; and
- (b) Any other date specified by Franchisor.
19.4 No Changes Without Franchisor's Consent
- (1) Franchisee must not allow any of the following to occur without first obtaining Franchisor's written consent:
- (a) Any change in the composition of Franchisee's Owners, directors, and officers;
- (b) Any alteration to Franchisee's constitution;
- (c) Any Disposal of Ownership Interests in Franchisee; or
- (d) Any reduction or alteration of Franchisee's capital.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a franchisee must provide details of the owners of the franchisee to Chatime under specific circumstances. The franchisee warrants that the owners, directors, and officers of the franchisee are as notified to Chatime at the date of the agreement's execution.
The franchisee must provide to Chatime details of the owners, including the number and class of ownership interests held by each owner, immediately upon request from Chatime. This information must be provided as of the date of execution of the agreement and any other date specified by Chatime.
Furthermore, the franchisee must not allow any changes in the composition of the franchisee's owners, directors, and officers without first obtaining Chatime's written consent. This requirement ensures that Chatime maintains control over who is involved in the ownership and management of its franchises.