What is the Chatime Affected Party required to do if an event causing a delay or failure occurs?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- 22.1 A party (Affected Party) is not liable for any delay or failure to perform an obligation (other than to pay money) under this Agreement caused by:
- (1) Act of God;
- (2) War, terrorism, riot, insurrection, vandalism, or sabotage;
- (3) Strike, lockout, ban, limitation of work, or other industrial disturbance; or
- (4) Law, rule, or regulation of any government or governmental agency and executive or administrative order or act of general or particular application.
- 22.2 The Affected Party must notify each other party as soon as practical of any anticipated delay or failure caused by an event referred to in clause 22.1 (Event).
- 22.3 The performance of the Affected Party's obligation (other than to pay money) is suspended for the period of delay caused by the Event.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if an event occurs that causes a delay or failure to perform an obligation under the agreement (excluding the obligation to pay money), the "Affected Party" must notify the other party as soon as practical. This event is defined as something caused by an Act of God, war, terrorism, riot, insurrection, vandalism, sabotage, strike, lockout, ban, limitation of work, other industrial disturbance, or any law, rule, or regulation of any government or governmental agency.
This notification requirement ensures that both Chatime and the franchisee are aware of the situation and can plan accordingly. The FDD states that the performance of the Affected Party's obligation is suspended for the period of delay caused by the Event.
For a prospective Chatime franchisee, this clause offers some protection against circumstances beyond their control. However, it's important to note that the obligation to pay money is specifically excluded from this clause, meaning that even during a force majeure event, the franchisee is still responsible for making payments to Chatime. Franchisees should clarify with Chatime what documentation or proof is required to demonstrate the occurrence and impact of such an event.