If a Chatime party is a trustee, in what capacities are they bound by the agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) If a party consists of more than one person, this Agreement binds each of them separately and any two or more of them jointly.
- (2) An obligation, representation, or warranty in favor of more than one person is for the benefit of them separately and jointly.
- (3) A party which is a trustee is bound both personally and in its capacity as a trustee.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if a party to the agreement is a trustee, they are bound both personally and in their capacity as a trustee. This means that the obligations and responsibilities outlined in the franchise agreement apply to the trustee in two distinct ways.
First, the trustee is bound in their individual capacity, meaning their personal assets and liabilities could be at risk if the franchise fails to meet its obligations. This provides Chatime with recourse directly against the individual acting as trustee. Second, the trustee is bound in their role as trustee, meaning the assets held in trust could be used to satisfy the obligations of the franchise agreement.
This dual obligation ensures that Chatime has comprehensive protection and recourse in case of any breach or default under the franchise agreement. It also means that the person acting as trustee must carefully consider their responsibilities and potential liabilities, both personally and in their fiduciary role, before entering into the agreement.