In the event of collection attempts for amounts due from a Chatime franchise, who is responsible for covering the expenses incurred?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Franchisor is a third-party beneficiary of this Agreement and may enforce it, solely and/or jointly with the Franchisee. I am aware that my violation of this Agreement will cause the Franchisor and the Franchisee irreparable harm; therefore, I acknowledge and agree that the Franchisee and/or the Franchisor may apply for the issuance of an injunction preventing me from violating this Agreement, and I agree to pay to the Franchisee and the Franchisor all the costs it/they incur(s), including, without limitation, legal fees and expenses, if this Agreement is enforced against me.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, if Chatime enforces the Franchise Agreement against a franchisee, the franchisee is responsible for paying all costs incurred by Chatime. These costs include, but are not limited to, legal fees and expenses. This stipulation applies if the franchisee violates the agreement, necessitating enforcement actions by Chatime.
This means that if a Chatime franchisee breaches the franchise agreement and Chatime has to take legal action to enforce the agreement, the franchisee will be responsible for covering Chatime's legal costs. This could include expenses related to lawyers, court fees, and other associated costs. This clause is designed to protect Chatime from incurring expenses due to a franchisee's non-compliance with the agreement.
This type of clause is relatively standard in franchise agreements. It ensures that franchisees bear the financial responsibility for their breaches of contract. Prospective Chatime franchisees should understand that any violation of the Franchise Agreement that leads to enforcement by Chatime could result in significant financial liabilities for the franchisee.