What happens if a receiver is appointed for a substantial part of the assets of a Chatime Developer?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
(h) A receiver, manager, liquidator or other Person acting in a comparable capacity is appointed for a substantial part of the assets of Developer.
13.4 Other Remedies.
In the event of grounds for a default by the Developer, Franchisor is entitled in its sole discretion to exercise any other remedies in lieu of or prior to terminating the Agreement, which may include but are not limited to reduction in the geographic area of the Development Area, removal of exclusivity within the Development Area, termination or suspension of any and all services provided to Developer by Franchisor, its Affiliates, or approved suppliers; suspension of delivery of product or supplies to Developer by Franchisor, its Affiliates, or approved suppliers; imposition of different credit terms for delivery of product or supplies to Developer by Franchisor, its Affiliates or approved suppliers; temporary operation of the Developer's Operation pursuant to this Agreement; removal of Developer from the Franchisor's website, directory, or social media; execution and delivery of a Release, and imposition of any additional or different requirements for Developer to maintain its right to continue operating the Developer's Operation.
Franchisor's exercise of any of these other remedies shall not in any way impair or waive Franchisor's right in the future to terminate the Agreement or to exercise any other rights under this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the appointment of a receiver, manager, liquidator, or comparable person for a substantial portion of a Developer's assets constitutes a default under the Development Agreement. This situation gives Chatime the right to exercise several remedies.
Specifically, Chatime has the discretion to take actions such as reducing the geographic area of the Development Area, removing exclusivity within that area, or terminating or suspending any services provided to the Developer. They can also suspend the delivery of products or supplies, impose different credit terms, temporarily operate the Developer's business, remove the Developer from the Chatime website or directory, require the execution of a release, or impose additional requirements for the Developer to continue operating.
It's important to note that Chatime's decision to exercise any of these remedies does not prevent them from later terminating the Development Agreement or exercising any other rights they have under the agreement. This clause provides Chatime with significant flexibility in addressing a Developer's financial instability, while also protecting their long-term interests and the integrity of the Chatime brand.