Under what conditions does Chatime have the right to require the franchisee to submit the Franchise Agreement to an agency for registration or approval?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(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 Chatime's 2025 Franchise Disclosure Document, Chatime has the right to require a franchisee to submit the Franchise Agreement to an agency for registration or approval under specific conditions. Chatime can exercise this right if it 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 mandates amendments to the Franchise Agreement as a prerequisite for approval or registration, and Chatime finds these amendments acceptable, Chatime will provide the franchisee with an addendum or other appropriate documents to formalize these changes. The franchisee is then required to execute these documents, indicating their agreement to the revised terms.
This clause ensures that Chatime can maintain compliance with all applicable laws and regulations throughout the Initial Term of the franchise agreement. It also protects Chatime from potential legal issues by ensuring the franchise agreement is properly registered and approved by relevant agencies when necessary. For a prospective franchisee, this means they may need to adapt their agreement based on legal requirements and should be prepared to cooperate with Chatime in fulfilling these requirements.