If Chatime chooses to exercise other remedies instead of terminating the agreement, does this affect Chatime's right to terminate the agreement in the future?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ation or dissolution under any law, admits or fails to contest the material allegations of any such pleading filed against it, or is adjudicated a bankrupt or insolvent; or
- (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;
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if grounds for default exist, Chatime can choose other remedies instead of immediately terminating the agreement. These remedies can include actions like reducing the development area, removing exclusivity, suspending services or supply delivery, changing credit terms, temporarily operating the franchise, removing the franchisee from Chatime's website, requiring a release, or imposing new requirements to continue operation.
Importantly, Chatime's decision to use these alternative remedies does not prevent them from later terminating the agreement or exercising any other rights they have under the agreement. This means that even if Chatime initially tries to work with a franchisee through alternative solutions, they still retain the option to terminate the agreement if the franchisee's default continues or if other issues arise.
This clause provides Chatime with flexibility in addressing franchisee defaults while safeguarding their long-term rights. For a prospective franchisee, this highlights the importance of adhering to the franchise agreement, as Chatime has various options for addressing non-compliance, including eventual termination, even if they initially pursue a less drastic course of action.