Does the dispute resolution clause survive the termination or rescission of the Chatime agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.5 Survival of Dispute Resolution Provisions. This clause 16 continues in force even where the Agreement has been fully performed, terminated or rescinded or where the parties or any of them have been discharged from the obligation to further perform the Agreement for any reason. The obligations with respect to dispute resolution outlined in this Article shall survive termination or expiration of this Agreement. This clause 16 applies even where the Agreement is otherwise void or voidable.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the dispute resolution provisions within the franchise agreement do indeed survive the termination or rescission of the agreement. Specifically, clause 16.5 explicitly states that it remains in effect even after the agreement has been fully performed, terminated, or rescinded, or if the parties are discharged from further obligations. This ensures that any disputes arising from the agreement, even after it is no longer active, will still be subject to the outlined dispute resolution process.
This survival clause is significant for prospective Chatime franchisees because it provides a framework for resolving disagreements that may surface even after the franchise relationship has ended. This could include issues related to payments, breaches of contract, or other obligations that were not fully resolved during the franchise term. By having a dispute resolution mechanism in place, both Chatime and the franchisee have a clear path to address these issues without necessarily resorting to court proceedings.
The FDD also specifies that the obligations related to dispute resolution, as detailed in the relevant article, will continue to be in force despite the termination or expiration of the agreement. Furthermore, this clause applies even if the agreement is considered void or voidable, reinforcing the commitment to resolve disputes through the agreed-upon methods, such as mediation and arbitration. This offers a level of protection and clarity for both parties, ensuring that disputes are handled in a consistent and predictable manner, regardless of the agreement's status.
It is important for potential Chatime franchisees to carefully review the entire dispute resolution clause and understand its implications. While the clause provides a structured approach to resolving conflicts, franchisees should also consider seeking legal counsel to fully understand their rights and obligations under the agreement, especially concerning the survival of these provisions after termination or rescission.