Under what circumstances can Chatime or its nominee enter a franchisee's business premises and operate the Franchised Business?

According to Chatime's 2025 Franchise Disclosure Document, Chatime has the right, but not the obligation, to appoint a manager for the Franchised Business and require the franchisee to pay, if in Chatime's judgment, the Franchised Business is not being managed properly. This can occur pending the appointment and training of a new Managing Owner or Operating Manager.

This clause in the franchise agreement protects Chatime's brand and standards by ensuring that a poorly managed franchise location can be temporarily taken over to maintain operational quality. The franchisee is responsible for covering the costs associated with this intervention, which could significantly impact their profitability during the period of management by Chatime or its appointee.

For a prospective Chatime franchisee, this highlights the importance of maintaining proper management and operational standards at their store. Failure to do so could result in Chatime stepping in and taking control of the business, with the franchisee bearing the financial burden of the appointed manager. This underscores the need for a franchisee to have a capable and well-trained Operating Manager and to adhere strictly to the operational guidelines provided in the Operations Manual.