If Chatime remedies a franchisee's default, is Chatime entitled to rely on the power of attorney?

According to Chatime's 2025 Franchise Disclosure Document, if a franchisee fails to meet their obligations under the franchise agreement, Chatime has the option, but not the obligation, to remedy that default. If Chatime chooses to remedy the default, it is entitled to rely on the power of attorney outlined in clause 24 of the agreement. This means Chatime can act on behalf of the franchisee to correct the issue.

This clause provides Chatime with a mechanism to step in and protect its brand and the network of franchisees if an individual franchisee is unable or unwilling to meet their obligations. By using the power of attorney, Chatime can take necessary actions to bring the franchisee into compliance without immediately resorting to termination of the agreement. This could include actions such as paying outstanding bills, making necessary repairs to the premises, or implementing required operational changes.

It is important to note that Chatime is not required to remedy a franchisee's default. The decision to do so is at Chatime's discretion. Furthermore, even if Chatime does remedy a default, this does not prevent them from later terminating the agreement if the franchisee continues to violate the terms of the agreement. This clause simply provides Chatime with an additional tool to manage franchisee compliance and protect its interests.

Prospective franchisees should carefully review the power of attorney clause (clause 24) to fully understand the scope of Chatime's authority to act on their behalf in the event of a default. They should also consider the potential implications of Chatime taking control of certain aspects of their business and how this could impact their autonomy and profitability.