Under what circumstances will a Chatime Outlet that is not operating still count towards the satisfaction of the Development Quota?

According to Chatime's 2025 Franchise Disclosure Document, an Outlet that is not operating may still count toward the Development Quota under specific circumstances. The determination of whether a developer has met their obligations is based on the number of Outlets opened and operating at the end of a Development Period.

However, Chatime specifies an exception: an Outlet that was previously opened and operating but becomes inoperable due to fire or other casualty (not caused by the developer or franchisee) or is required to close due to a Force Majeure Event will still be counted toward meeting the Development Quota. This clause protects the developer from being penalized for unforeseen circumstances that cause temporary or permanent closure of an Outlet.

Any other Outlet must be opened and operating in compliance with the applicable Franchise Agreement to be counted towards satisfaction of the Development Quota. This means that if an Outlet is not operating due to reasons other than those specified (fire, casualty, or Force Majeure Event) or is not in compliance with the Franchise Agreement, it will not count toward the developer's obligation. This ensures that only viable and compliant Outlets contribute to the fulfillment of the development requirements.