What constitutes grounds for Chatime to immediately terminate the franchise agreement due to abandonment?

According to Chatime's 2025 Franchise Disclosure Document, Chatime can terminate the franchise agreement immediately with written notice if the franchisee voluntarily abandons the franchised business. This is a significant clause, as it means Chatime does not need to provide a notice period or an opportunity to cure the breach before terminating the agreement if abandonment occurs.

Abandonment, in this context, likely refers to the franchisee ceasing operations at the Chatime store without the franchisor's consent and without a reasonable justification. This could include closing the store for an extended period, removing equipment, or otherwise indicating a clear intention to discontinue the business. The FDD does not define 'abandonment,' so it would be prudent for a prospective franchisee to seek clarification from Chatime on what specific actions or inactions would be considered abandonment under the agreement.

This immediate termination right is in addition to other termination rights Chatime has, which generally require written notice and an opportunity to cure any breaches. The immediate termination for abandonment underscores the importance Chatime places on continuous operation and maintaining its brand presence. Franchisees should be aware of this clause and ensure they communicate any operational challenges or potential closures with Chatime to avoid potential disputes or termination of the franchise agreement.