How long must a force majeure event last before Chatime can terminate the franchise agreement?
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;
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 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 governmental regulations.
This clause protects Chatime from being held liable for delays or failures to perform obligations (other than payment obligations) due to these unforeseen events. However, if such an event persists for an extended period, specifically more than 180 days, Chatime reserves the right to terminate the agreement.
For a prospective franchisee, this means that while Chatime acknowledges events outside of their control, there is a limit to how long the franchise can remain inoperable due to such events before Chatime may choose to end the agreement. This highlights the importance of having contingency plans and insurance to mitigate the impact of potential force majeure events on the Chatime franchise.