Can the Chatime Franchisor enforce the agreement solely, jointly, or not at all with the Franchisee?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
6. ENFORCEMENT
- (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.
- (b) Due to the importance of this Agreement to the Franchisee and the Franchisor, any claim I might have against the Franchisee or the Franchisor is a separate matter and does not entitle me to violate, or justify any violation of this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, the franchisor can enforce the franchise agreement solely and/or jointly with the franchisee. The document states that Chatime is a third-party beneficiary of the agreement and can enforce it in either capacity. This means that Chatime has the right to take legal action to ensure compliance with the terms of the agreement, independent of or in conjunction with the franchisee.
This provision is significant for prospective franchisees as it clarifies the franchisor's ability to protect its interests and the integrity of the Chatime network. The agreement emphasizes that any violation of the agreement will cause irreparable harm to both the franchisor and the franchisee. Consequently, both parties have the right to seek an injunction to prevent any breaches. Furthermore, the franchisee is responsible for covering all costs, including legal fees and expenses, incurred by the franchisor and/or franchisee in enforcing the agreement against them.
This clause reinforces the importance of adhering to the franchise agreement and highlights the potential legal and financial consequences of non-compliance. It also underscores the interconnectedness of the Chatime franchise system, where the actions of one franchisee can impact the entire network and, therefore, the franchisor's vested interest in upholding the agreement's terms.
Finally, the agreement specifies that any claims a franchisee might have against the franchisor or another franchisee are considered separate matters and do not justify violating the franchise agreement. This provision aims to prevent franchisees from using potential grievances as a reason to disregard their contractual obligations, ensuring the consistent and orderly operation of the Chatime franchise system.