If a Chatime franchisee breaches the provisions related to restraint applies to conduct in any capacity, can Chatime immediately terminate the agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) Notwithstanding any other provision in this clause 15, Franchisor may terminate this Agreement immediately upon written notice to Franchisee if:
- (a) The Defaulting Party breaches any provision under clause 6 (Initial and Continuing Fees), 9.2 (No Other Business Interests) or 9.3 (Restraint Applies to Conduct in Any Capacity).
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime can terminate the franchise agreement immediately if the franchisee breaches the provisions related to restraint applies to conduct in any capacity.
Specifically, if a franchisee violates clause 9.3, which concerns conduct related to restraint of trade, Chatime has the right to terminate the agreement with written notice. This immediate termination is an exception to the standard procedure, which usually involves a written notice specifying the breach and providing a period (between 3 and 30 days) for the franchisee to remedy the breach.
This clause highlights the importance Chatime places on franchisees adhering to the non-compete and confidentiality obligations. A prospective franchisee should understand that any violation of these provisions could lead to immediate termination of their franchise agreement, resulting in a loss of their investment and business. Franchisees should carefully review and understand the scope and limitations of the restraint provisions outlined in clause 9.2 and 9.3.