Under what condition can Chatime's Acceptance Notice vary the terms of the Offer Notice?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) The Acceptance Notice may contain terms which vary the terms of the Offer Notice so long as the terms upon which Franchisor agrees to buy the Business are not commercially less favorable to Franchisee than those contained in the Offer Notice. For example, if the consideration, terms, and/or conditions offered by a third party are such that Franchisor is not reasonably able to furnish the same types of consideration, terms, and/or conditions, then Franchisor may purchase the interests proposed to be transferred for the reasonable equivalent in cash.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the Acceptance Notice, which is Chatime's response to a franchisee's offer to sell their business, can include terms that differ from the original Offer Notice under specific conditions. This occurs when the terms upon which Chatime agrees to purchase the business are not commercially less favorable to the franchisee than the terms initially presented in the Offer Notice.
For instance, if a third party's offer includes consideration, terms, or conditions that Chatime cannot reasonably match, Chatime can propose purchasing the interests to be transferred for the reasonable equivalent in cash. This ensures that the franchisee is not disadvantaged by Chatime's counter-offer.
This provision allows Chatime flexibility in negotiating the purchase of a franchise while protecting the franchisee's interests by ensuring they receive terms that are at least as favorable as the original offer. Franchisees should carefully review any Acceptance Notice from Chatime to ensure the terms meet this standard before agreeing to sell their business.