If Chatime chooses to remedy a franchisee's obligation, on what can Chatime rely?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Pending the appointment and training of a new Managing Owner or Operating Manager or if, in our judgment, the Franchised Business is not being managed properly, we have the right, but not the obligation, to appoint a manager for the Franchised Business and require you to pay in the manner described in clause 14.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
Based on the 2025 Chatime Franchise Disclosure Document, if the Franchised Business is not being managed properly, Chatime has the right, but not the obligation, to appoint a manager for the Franchised Business. Chatime can then require the franchisee to pay for the manager's services as described in clause 14 of the agreement.
This means that Chatime has the option to step in and manage a struggling franchise location, ensuring that it meets the brand's standards and maintains profitability. However, this is not an obligation, and Chatime can choose whether or not to exercise this right.
For a prospective franchisee, this clause provides a safety net, as Chatime can provide management support if needed. However, the franchisee will be responsible for covering the expenses associated with the appointed manager, as detailed in clause 14 of the franchise agreement. It is important for a prospective franchisee to understand the details of clause 14 to be fully aware of the potential costs involved if Chatime chooses to appoint a manager.