Does failure by Chatime to enforce its rights constitute a waiver of those rights?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
only to the extent that the jurisdictional requirements of the New York General Business Law, Article 33, §§680 through 695, and of the Codes, Rules, and Regulations of the State of New York, Title 13, Chapter VII, §§200.1 through 201.16, with respect to each such provision, are met independent of the Amendment. This Amendment will have no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto have duly executed, sealed, and delivered this Amendment to the Franchise Agreement on the same date as that on which the Franchise Agreement was executed.
CHATIME FRANCHISE, LLC FRANCHISEE
| By: | By: |
|---|---|
| Name: | Name: |
| Title: | Title: |
North Dakota
NORTH DAKOTA
NORTH DAKOTA ADDENDUM TO THE CHATIME FRANCHISE, LLC FRANCHISE DISCLOSURE DOCUMENT
THE SECURITIES COMMISSIONER HAS HELD THE FOLLOWING TO BE UNFAIR, UNJUST, OR INEQUITABLE TO NORTH DAKOTA FRANCHISEES (NORTH DAKOTA CENTURY CODE ("NDCC") §51-19-09):
- A. Restrictive Covenants: Franchise disclosure documents that disclose the existence of covenants restricting competition contrary to NDCC §9-08-06, without further disclosing that such covenants will be subject to the statute.
- B. Situs of Arbitration Proceedings: Franchise agreements providing that the parties must agree to the arbitration of disputes at a location that is remote from the site of the franchisee's business.
- C. Restrictions on Forum: Requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota.
- D. Liquidated Damages and Termination Penalties: Requiring North Dakota franchisees to consent to liquidated damages or termination penalties.
- E. Applicable Laws: Franchise agreements that specify that they are to be governed by the laws of a state other than North Dakota.
- F. Waiver of Trial by Jury: Requiring North Dakota franchises to consent to the waiver of a trial by jury.
- G. Waiver of Exemplary and Punitive Damages: Requiring North Dakota franchisees to consent to a waiver of exemplary and punitive damage.
- H. General Release: Franchise Agreements that require the franchisee to sign a general release upon renewal of the franchise agreement.
- I. Limitation of Claims: Franchise agreements that require the franchisee to consent to a limitation of claims. The statute of limitations under North Dakota law applies.
- J. Enforcement of Agreement: Franchise agreements that require the franchisee to pay all costs and expenses incurred by the franchisor in enforcing the agreement. The prevailing party in any enforcement action is entitled to recover all costs and expenses including attorney's fees.
In recognition of the requirements of NDCC §51-19-09, the Franchise Disclosure Document of Chatime Franchise, LLC for use in the State of North Dakota will be amended to include the following:
- Item 17(c) will be supplemented by the addition of the following language:
You will not be required to sign a general release upon renewal of the Franchise Agreement or Multi-Unit Development Agreement.
- Item 17(i) will be supplemented by the addition of the following language:
You will not be required to consent to liquidated damages or termination penalties.
- Item 17(r) will be supplemented by the addition of the following language:
All covenants restricting competition are subject to NDCC §9-08-06. Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota.
4.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
The 2025 Chatime Franchise Disclosure Document includes provisions related to waivers specifically within the context of New York and North Dakota franchise laws. For New York franchisees, certain amendments ensure that franchisees do not waive rights conferred upon them by Article 33 of the General Business Law of the State of New York. This means that the standard choice of law within the franchise agreement should not be interpreted as a relinquishment of rights under New York law for either the franchisor or franchisee. Similarly, franchisees in North Dakota will not be required to sign a general release upon renewal of the Franchise Agreement or Multi-Unit Development Agreement. These stipulations are added to ensure compliance with North Dakota Century Code §51-19-09.
For prospective franchisees, these clauses are favorable as they protect their rights under specific state laws, preventing Chatime from inadvertently or intentionally circumventing these protections through standard agreement terms. The inclusion of these amendments suggests that Chatime is aware of and responsive to state-specific franchise regulations, which can provide a level of assurance to franchisees operating in these states.
However, the FDD excerpts do not explicitly state whether Chatime's failure to enforce its rights in other general contexts would constitute a waiver of those rights. A prospective franchisee should seek clarification from Chatime regarding this matter to fully understand the implications of non-enforcement outside of the specific clauses mentioned for New York and North Dakota.