What are the confidentiality rules during the Chatime mediation process?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
nce with this Agreement; or
(3) Engaging or being concerned or interested in any business or activity pursuant to which Franchisor has given its prior written consent.
7.8 Disgorgement
In addition to all other remedies and rights of Franchisor under this Agreement, if any of Developer, Developer Affiliate, Franchisee, Guarantor or their Interested Parties breaches clause 7.2 or 7.3, Developer must account for and pay to Franchisor all compensation, profits, monies, accruals, increments or other benefits derived or received as a result of any such breach.
8 Indemnity and Limitation of Liability
8.1 Indemnity
- (1) Developer Parties indemnify Franchisor and each of its Affiliates (Chatime Group) against all:
- (a) Losses incurred by the Chatime Group;
- (b) Liabilities incurred by the Chatime Group; and
- (c) All Legal Costs and other Costs and expenses incurred by the Chatime Group in connection with a demand, action, arbitration or other proceeding (including mediation, compromise, out of court settlement or appeal),
arising directly or indirectly as a result of or in connection with:
- (d) A breach by Developer Parties of this Agreement or any Collateral Agreement;
- (e) Any injury to, or loss of property of, any person in or on premises from which the business is conducted;
- (f) Developer's taxes, liabilities or Costs of Developer's Operation;
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
Based on the 2025 Chatime Franchise Disclosure Document, the confidentiality rules during mediation are tied to obligations outlined in other clauses of the agreement. Specifically, clause 8.1(1)(c) states that the Developer Parties (which includes the franchisee) indemnify Chatime against all losses, liabilities, and legal costs arising from any proceeding, including mediation.
Clause 7.6 discusses confidentiality agreements for Interested Parties, stating they must adhere to confidentiality obligations similar to those in clause 6, as required by Chatime. Clause 7.5 requires directors, managers, and key employees to enter into confidentiality agreements before accessing Confidential Information, with restraints similar to those in clause 7.
In practical terms, this means a Chatime franchisee is responsible for maintaining the confidentiality of sensitive information during any mediation. This responsibility extends to ensuring that their employees, managers, and other involved parties also adhere to these confidentiality requirements. Failure to do so could result in financial liabilities for the franchisee, as they are obligated to indemnify Chatime for any losses or costs incurred due to breaches of confidentiality. Prospective franchisees should carefully review clauses 6, 7, and 8 of the Franchise Agreement to fully understand the scope of these obligations and potential liabilities.