If Chatime transfers its rights via novation, what is the Developer Party required to execute?

According to Chatime's 2025 Franchise Disclosure Document, if Chatime elects to transfer its rights, interests, obligations, or liabilities under the agreement by novation to a third party, the Developer Parties must execute a deed or agreement of novation. This document, prepared by Chatime, substitutes a third party in place of Chatime. The third party then becomes entitled to the benefits and responsible for the rights, obligations, and liabilities of Chatime under the agreement.

In simpler terms, if Chatime decides to transfer the agreement to another company, the developer must sign a document acknowledging and agreeing to this transfer. This ensures that all parties are aware of the change and that the new company takes on Chatime's responsibilities and benefits under the original agreement.

This requirement is fairly standard in franchising, as it allows the franchisor flexibility in structuring its business. However, it's crucial for a prospective Chatime developer to understand that they will be legally bound to accept a new franchisor if Chatime chooses to transfer its rights. The developer should carefully review the terms of the novation agreement to ensure they are comfortable with the new party and the continued obligations.