Can the Chatime Franchisor require a general release as a condition of renewal?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
IN WITNESS WHEREOF, the parties hereto have duly executed, sealed, and delivered this Amendment to the Multi-Unit Development Agreement on the same date as that on which the Franchise Agreement was executed.
CHATIME FRANCHISE, LLC DEVELOPER
| By: | By: |
|---|---|
| Name: | Name: |
| Title: | Title: |
MARYLAND
MARYLAND ADDENDUM TO THE CHATIME FRANCHISE, LLC FRANCHISE DISCLOSURE DOCUMENT
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Bus. Reg. Code Ann. §14-201 et seq., the Chatime Franchise, LLC Franchise Disclosure Document for use in the State of Maryland will be amended as follows:
- Items 17(c) and 17(m), under the headings entitled "Requirements for Franchisee to Renew or Extend" and "Conditions for Franchisor Approval of Transfer," will be amended by the addition of the following language at the end of those sections:
However, a general release required as a condition of approval will not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- Item 17(f), under the heading entitled "Termination by Franchisor With Cause," will be amended by the addition of the following language at the end of the section:
The provision in the Franchise Agreement which provides for termination upon bankruptcy of the franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. §101 et seq.).
- Item 17(v), under the heading entitled "Choice of Forum," will be amended by the addition of the following language at the end of those sections:
However, you may sue us in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
-
- Exhibit F to the Franchise Disclosure Document (Acknowledgement Addendum to Franchise Agreement) is deleted. Franchisee and its principals are not required to complete and sign the Acknowledgement Addendum.
-
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, whether Chatime can require a general release as a condition of renewal depends on the state in which the franchise operates. In Maryland and Minnesota, specific addenda to the Franchise Disclosure Document address this issue.
In Maryland, Item 17(c), concerning "Requirements for Franchisee to Renew or Extend," is amended to state that a general release required as a condition of approval will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This means that while a general release might be required, it cannot waive the franchisee's rights under Maryland franchise law.
Similarly, in Minnesota, Item 17(m), regarding "Conditions for Franchisor Approval of Transfer," is amended to specify that any general release will not apply to any liability under the Minnesota Franchise Law. Additionally, Minnesota law provides franchisees with certain termination, non-renewal, and transfer rights, requiring 180 days' notice of nonrenewal of the Franchise Agreement and that consent to the transfer of the franchise not be unreasonably denied. These stipulations protect the franchisee's rights under Minnesota law, ensuring that a general release cannot waive these protections.