Besides termination, what other remedies can Chatime exercise if a franchisee defaults?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ation or dissolution under any law, admits or fails to contest the material allegations of any such pleading filed against it, or is adjudicated a bankrupt or insolvent; or
- (i) A receiver, manager, liquidator, or other Person acting in a comparable capacity is appointed for a substantial part of the assets of Franchisee.
- 15.4 Other Remedies. In the event of grounds for a default by the Franchisee, Franchisor is entitled in its sole discretion to exercise any other remedies in lieu of or prior to terminating the Agreement, which may include but are not limited to termination or suspension of any and all services provided to Franchisee by Franchisor, its Affiliates, or approved suppliers; suspension of delivery of product or supplies to Franchisee by Franchisor, its Affiliates, or approved suppliers; imposition of different credit terms for delivery of product or supplies to Franchisee by Franchisor, its Affiliates or approved suppliers; temporary operation of the Franchised Business pursuant to Section 14 of this Agreement; removal of Franchisee from the Franchisor's website, directory, or social media; execution and delivery of a Release in the form attached as Exhibit 1, and imposition of any additional or different requirements for Franchisee to maintain its right to continue operating the Franchised Business. Franchisor's exercise of any of these other remedies shall not in any way impair or waive Franchisor's right in the future to terminate the Agreement or to exercise any other rights under this Agreement.
16 Dispute Resolution
- 16.1 Notice of Dispute.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, in the event of a franchisee default, Chatime has several remedies it can exercise in addition to, or instead of, terminating the franchise agreement. These remedies are at Chatime's sole discretion. They include termination or suspension of any and all services provided to the franchisee by Chatime, its affiliates, or approved suppliers. Chatime can also suspend the delivery of products or supplies to the franchisee from Chatime, its affiliates, or approved suppliers.
Chatime may impose different credit terms for the delivery of products or supplies. Chatime has the option to temporarily operate the franchised business. Chatime can also remove the franchisee from Chatime's website, directory, or social media platforms. Chatime may require the franchisee to execute and deliver a release in a specific form. Finally, Chatime can impose additional or different requirements for the franchisee to maintain its right to continue operating the franchised business.
It is important to note that Chatime's choice to exercise any of these alternative remedies does not prevent them from later terminating the agreement or exercising any other rights they have under the agreement. This provides Chatime with flexibility in addressing franchisee defaults while protecting their long-term interests and brand standards. Additionally, if a franchisee breaches clauses related to business interests or conduct, Chatime can require the franchisee to account for and pay all compensation, profits, or benefits derived from the breach.