What happens if a receiver is appointed for a substantial part of the assets of a Chatime franchisee?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i) A receiver, manager, liquidator, or other Person acting in a comparable capacity is appointed for a substantial part of the assets of Franchisee.
- 15.4 Other Remedies. In the event of grounds for a default by the Franchisee, 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 termination or suspension of any and all services provided to Franchisee by Franchisor, its Affiliates, or approved suppliers; suspension of delivery of product or supplies to Franchisee by Franchisor, its Affiliates, or approved suppliers; imposition of different credit terms for delivery of product or supplies to Franchisee by Franchisor, its Affiliates or approved suppliers; temporary operation of the Franchised Business pursuant to Section 14 of this Agreement; removal of Franchisee from the Franchisor's website, directory, or social media; execution and delivery of a Release in the form attached as Exhibit 1, and imposition of any additional or different requirements for Franchisee to maintain its right to continue operating the Franchised Business. 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, if a receiver, manager, liquidator, or other person acting in a comparable capacity is appointed for a substantial part of the assets of a Chatime franchisee, it constitutes grounds for default.
In the event of such a default, Chatime has the discretion to exercise several remedies instead of or before terminating the franchise agreement. These remedies include terminating or suspending any services provided to the franchisee by Chatime, its affiliates, or approved suppliers. Chatime may also suspend the delivery of products or supplies, impose different credit terms, temporarily operate the franchised business, remove the franchisee from Chatime's website or social media, require the franchisee to sign a release, and impose additional requirements for the franchisee to maintain their right to continue operating the business.
It is important to note that Chatime's exercise of any of these remedies does not waive their right to terminate the agreement or exercise any other rights under the agreement in the future. This means that even if Chatime chooses to implement alternative measures initially, they still retain the option to terminate the franchise agreement later if deemed necessary.