Are the Chatime Franchisor's rights to indemnity affected by the termination of the Franchise Agreement or any Collateral Agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Franchisor's rights at law and under this Agreement, including its right to be indemnified under this clause, are not affected by:
- (a) Franchisor ending the Franchise or the termination of any Collateral Agreement;
- (b) Franchisor accepting Franchisee's repudiation of this Agreement or any related Agreement; or
- (c) Anything else.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchisor's rights to indemnity are not affected by the termination of the Franchise Agreement or any Collateral Agreement. This means that even if the franchise agreement is terminated, Chatime still retains its right to seek compensation from the franchisee for certain liabilities or losses.
Specifically, Chatime's right to be indemnified remains intact regardless of whether Chatime ends the franchise or terminates any related agreements. This also applies if Chatime accepts the franchisee's rejection of the agreement or any related agreements. Essentially, the franchisor's right to indemnity is preserved under all circumstances.
This provision protects Chatime by ensuring they can still recover losses or costs incurred due to a franchisee's actions or breaches, even after the franchise relationship has ended. For a prospective franchisee, this highlights the importance of adhering to the franchise agreement and fulfilling all obligations, as liability for indemnification can extend beyond the term of the agreement.