How long must a force majeure event continue before Chatime can terminate the agreement immediately?
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).
- (b) A force majeure event (as referred to in clause 23) continues for more than 180 days;
- (c) Franchisee no longer holds a license that Franchisee must hold to carry on The Franchised Business;
- (d) Franchisee voluntarily abandons The Franchised Business;
- (e) Franchisee or a Guarantor is convicted of a serious offense;
- (f) The Franchised Business is operated in a way that endangers public health or safety;
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 a force majeure event continues for more than 180 days. A force majeure event, as defined in clause 23, includes events such as acts of God, war, terrorism, riots, strikes, or changes in laws and regulations.
This clause provides Chatime with a significant protection in circumstances beyond anyone's control that severely impact the franchisee's ability to operate. For a prospective franchisee, this means that if an uncontrollable event prevents them from operating their Chatime store for an extended period (more than 180 days), Chatime has the right to terminate the agreement.
It is important for a potential Chatime franchisee to understand what constitutes a force majeure event under the agreement and to assess the potential risks in their specific location. Franchisees should also consider business interruption insurance to mitigate potential losses from such events, although the insurance may not prevent Chatime from terminating the agreement if the interruption lasts longer than 180 days.