Under what circumstances can Chatime terminate the Franchise Agreement if training programs are not completed?

According to Chatime's 2025 Franchise Disclosure Document, Chatime retains the right to terminate the Franchise Agreement if a franchisee does not complete the approved training programs within a reasonable time, or as agreed to in writing with the franchisor. This condition underscores the importance Chatime places on its training programs and their successful completion for franchisees to maintain their franchise agreement.

If a franchisee does not complete all training and certification requirements in a timely manner and in line with training benchmarks and to Chatime's satisfaction, the franchisee will be liable for all additional training costs, and the store opening will be delayed. All costs incurred due to the delay will be borne by the franchisee. This highlights the financial risks associated with not meeting the training requirements, as franchisees may incur additional expenses and face delays in opening their Chatime store.

Chatime also requires franchisees, their senior managers, and any guarantors to complete a series of ongoing competency-based training programs throughout the term of the agreement. If a franchisee fails to meet the approved training programs in a timely manner, Chatime will provide additional training at the franchisee's cost at a location within their Territory or at another location determined by Chatime. The franchisee will also pay Chatime reasonable compensation and reimburse them for all associated costs and expenses, including compensation, travel, accommodations, and meals, upon receipt of an invoice. This ongoing training requirement ensures that franchisees and their staff remain up-to-date with Chatime's standards and practices, but it also represents a continuing financial obligation for the franchisee.