What is the deadline for transferring a Chatime franchise interest after the death or incapacitation of a person with a majority interest?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.7 Transfer Upon Death or Incapacitation. Upon the death or permanent incapacity (mental or physical) of any person with a majority or controlling interest in this Agreement, in you, or in all or substantially all of the assets of the Franchisee' Operations, the executor, administrator, or personal representative of such person shall transfer such interest to a third party approved by Franchisor within one year after such death or mental incapacity. Such transfers, including transfers by devise or inheritance, shall be subject to the requirements in this Clause 13.
- 13.8 Transfers Void. Any purported or attempted transfer, by operation of law or otherwise, made without Franchisor's prior written consent will be considered null and void and will be considered a material breach of this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if a person holding a majority or controlling interest in the franchise agreement, the franchisee, or substantially all of the franchisee's assets dies or becomes permanently incapacitated (mentally or physically), their executor, administrator, or personal representative has one year to transfer that interest. The transfer must be to a third party approved by Chatime.
This requirement ensures that the Chatime franchise continues to operate under approved management even in unforeseen circumstances. The one-year timeframe provides some flexibility for the deceased's or incapacitated person's estate to handle the transfer while also ensuring a timely resolution.
It is important to note that all such transfers, including those by devise or inheritance, are subject to the standard transfer requirements outlined in the franchise agreement. Any transfer attempted without Chatime's prior written consent will be considered void and a material breach of the agreement.