Under what condition can Chatime require a franchisee to submit the franchise agreement to an agency for registration or approval?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
5.6 Governmental Approvals (Including Registration)
(1) Franchisee agrees to execute any and all instruments and documents, render such assistance, and otherwise cooperate with Franchisor, in order to obtain all governmental approvals Franchisor is required to obtain or which, in the opinion of Franchisor, are
- necessary at any time during the Initial Term, in the opinion of Franchisor, to comply with any Legal Requirements.
- (2) Franchisor has the right exercisable at its option, to submit, or to require Franchisee to submit, this Agreement to any Agency for registration or approval in the event Franchisor determines such registrations or approvals are necessary in order to comply with any Legal Requirements. If the Agency requires that any amendments be made to this Agreement as a condition to such approval or registration and such amendments are acceptable to Franchisor, Franchisor will deliver to Franchisee for execution an addendum to this Agreement, or other appropriate documents, to reflect such amendments.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, Chatime has the right to require a franchisee to submit the franchise agreement to an agency for registration or approval. This condition is triggered if Chatime determines that such registrations or approvals are necessary to comply with any Legal Requirements. This determination is made at Chatime's discretion.
If an agency requires amendments to the agreement as a condition of approval or registration, and Chatime finds these amendments acceptable, Chatime will provide the franchisee with an addendum or other appropriate documents to reflect these changes. The franchisee would then be required to execute these documents.
This clause ensures that Chatime can maintain compliance with all applicable laws and regulations throughout the initial term of the franchise agreement. It also places the onus on the franchisee to cooperate with Chatime in obtaining necessary governmental approvals. Prospective franchisees should be aware that they may need to adapt their franchise agreement based on legal requirements and should factor in potential legal compliance costs.