Under what circumstances will Chatime terminate the exclusivity of my Development Rights?

According to Chatime's 2025 Franchise Disclosure Document, the exclusivity of your Development Rights can be terminated if you fail to meet the company's guidelines for multi-unit development and ownership. Specifically, Chatime may terminate your Development Rights, alter your Development Territory, or end the exclusivity tied to your Development Rights if you do not continue to meet their then-current guidelines for multi-unit development and ownership. If Chatime terminates the exclusivity, they reserve the right to develop and operate franchises themselves within your Development Territory or grant that right to a third party.

It is important to note that Chatime does not require minimum sales quotas for each individual Outlet. However, franchisees must have the number of Outlets open and operating as specified in their Development Quota. This means that while individual store performance isn't directly tied to maintaining development rights, meeting the overall development schedule is crucial.

Prospective franchisees should carefully review Chatime's multi-unit development guidelines to fully understand the criteria for maintaining Development Rights. This includes understanding the required development schedule, financial performance expectations, and any other operational standards that Chatime uses to evaluate multi-unit franchisees. Understanding these guidelines is essential for franchisees to avoid losing their exclusive development rights and the potential for Chatime or a third party to establish competing franchises within their designated territory.