In the Chatime General Release, what is the purpose of including the resident's state?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ny 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.
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- 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.
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Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, the inclusion of the resident's state in the General Release is related to specific state franchise laws that may impact the enforceability and applicability of the release. Certain states, such as Maryland, New York, and Minnesota, have franchise laws that provide specific protections to franchisees, including stipulations that general releases will not waive rights or claims under those state's franchise laws. Therefore, the franchisee's resident state is important to determine which state laws and addenda apply, modifying the standard terms of the General Release. These state-specific addenda ensure that franchisees do not inadvertently waive their rights under applicable state franchise laws.
For example, the Maryland Addendum to the Chatime Franchise Disclosure Document explicitly states that a general release required as a condition of approval will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Similarly, the Minnesota Addendum specifies that any general release will not apply to any liability under the Minnesota Franchise Law. The New York Addendum ensures that franchisees retain all rights and causes of action arising from the provisions of Article 33 of the General Business Law of the State of New York, despite any general release.
This means that a Chatime franchisee signing a General Release needs to understand how their state's franchise laws interact with the release's terms. The state of residence determines which specific addenda apply, potentially altering or limiting the scope of the General Release. This ensures that franchisees are not unknowingly relinquishing protections afforded to them by their state's franchise laws, particularly concerning termination, non-renewal, transfer rights, and liabilities.