Can Chatime impose any additional or different requirements for a Chatime franchisee to maintain its right to continue operating the Developer's Operation as a remedy for a default?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of grounds for a default by the Developer, Franchisor is entitled in its sole discretion to exercise any other remedies in lieu of or prior to terminating the Agreement, which may include but are not limited to reduction in the geographic area of the Development Area, removal of exclusivity within the Development Area, termination or suspension of any and all services provided to Developer by Franchisor, its Affiliates, or approved suppliers; suspension of delivery of product or supplies to Developer by Franchisor, its Affiliates, or approved suppliers; imposition of different credit terms for delivery of product or supplies to Developer by Franchisor, its Affiliates or approved suppliers; temporary operation of the Developer's Operation pursuant to this Agreement; removal of Developer from the Franchisor's website, directory, or social media; execution and delivery of a Release, and imposition of any additional or different requirements for Developer to maintain its right to continue operating the Developer's Operation.
Franchisor's exercise of any of these other remedies shall not in any way impair or waive Franchisor's right in the future to terminate the Agreement or to exercise any other rights under this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, if a Chatime developer is in default, Chatime has the right to impose additional or different requirements for the developer to maintain its right to continue operating the Developer's Operation. These remedies are at Chatime's sole discretion and can be exercised instead of or before terminating the agreement.
These remedies may include, but are not limited to, reducing the geographic area of the Development Area, removing exclusivity within the Development Area, or terminating or suspending any and all services provided to the developer by Chatime, its affiliates, or approved suppliers. Chatime may also suspend the delivery of product or supplies, impose different credit terms, temporarily operate the Developer's Operation, remove the developer from Chatime's website or social media, require the execution of a release, or impose any additional or different requirements for the developer to maintain its right to continue operating.
It is important to note that Chatime's exercise of any of these remedies does not waive its right to terminate the agreement or exercise any other rights in the future. This clause provides Chatime with significant flexibility in addressing defaults by developers, allowing them to implement various measures to try and resolve the issue before resorting to termination.