For Chatime, what happens to the performance of an obligation of a party affected by an event that causes a delay?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
22 Force Majeure
- 22.1 A party (Affected Party) is not liable for any delay or failure to perform an obligation (other than to pay money) under this Agreement caused by:
- (1) Act of God;
- (2) War, terrorism, riot, insurrection, vandalism, or sabotage;
- (3) Strike, lockout, ban, limitation of work, or other industrial disturbance; or
- (4) Law, rule, or regulation of any government or governmental agency and executive or administrative order or act of general or particular application.
- 22.2 The Affected Party must notify each other party as soon as practical of any anticipated delay or failure caused by an event referred to in clause 22.1 (Event).
- 22.3 The performance of the Affected Party's obligation (other than to pay money) is suspended for the period of delay caused by the Event.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a party that is affected by an event that causes a delay in their performance of an obligation under the agreement is not held liable for the delay or failure to perform, as long as the obligation does not involve paying money. This applies to both Chatime and the franchisee.
The types of events that trigger this clause include acts of God, war, terrorism, riot, insurrection, vandalism, sabotage, strikes, lockouts, bans, limitations of work, other industrial disturbances, or any law, rule, or regulation from a government or governmental agency. The affected party must notify the other party as soon as practical about the anticipated delay or failure caused by such an event.
During the period of delay caused by one of these events, the performance of the affected party's obligation is suspended. This means that the party is not required to fulfill the obligation until the event causing the delay has passed. However, this suspension does not apply to obligations to pay money, which must still be fulfilled even during a force majeure event. This clause is fairly standard in franchise agreements, as it protects both parties from unforeseen circumstances that could prevent them from meeting their contractual obligations.