How long does a Chatime franchisee have to cure defaults after notice?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| g. Curable defaults | FA: §15.3(1) | All defaults must be cured within 30 days after notice. | | | MDA: § 13.3(1) | All defaults must be cured within 30 days after notice. | | h. n-curable defaults | FA: §15.3(4) | We may terminate your Franchise Agreement immediately upon written notice to you if (i) you or a guarantor breach any provision under Clauses 6, 9.2, or 9.3 of your Franchise Agreement, (ii) a force majeure event continues for more than 180 days, (iii) you no longer hold a license required to carry on your franchise business, (iv) you voluntarily abandon your franchise business, (v) you or a guarantor are convicted of a serious offense, (vi) your operations endanger public health or safety, (vii) you are fraudulent in connection with your operations or commit a fraud upon us, or (viii) you voluntarily petition in bankruptcy, are adjudicated a bankrupt or insolvent, or a receiver, manager, liquidator, or other person is appointed for a substantial part of your assets. | |-----------------------------|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | MDA: §13.3(4) | We may terminate your MDA immediately upon written notice to you if (i) you or a guarantor breach any provision under Clauses 6, 7.2, or 7.3 of your MDA, (ii) a force majeure event continues for more than 180 days, (iii) you no longer hold a license required to carry on your franchise business, (iv) you voluntarily abandon your multi-unit development business, (v) you or a guarantor are convicted of a serious offense, (vi) your operations endanger public health or safety, (vii) you are fraudulent in connection with your operations or commit a fraud upon us, or (viii) you voluntarily petition in bankruptcy, are adjudicated a bankrupt or insolvent, or a receiver, manager, liquidator, or other person is appointed for a substantial part of your assets.
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 43–52)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a franchisee typically has 30 days to cure defaults after receiving notice. This applies to both the Franchise Agreement (FA) and the Multi-Unit Development Agreement (MDA). However, the FDD also states that Chatime has the right to terminate the Franchise Agreement or MDA with cause, and depending on the reason for termination, Chatime may not provide an opportunity to cure the default.
This means that while most defaults allow a 30-day cure period, certain serious breaches could lead to immediate termination without any chance to rectify the situation. The FDD lists several examples of defaults that are not curable, such as breaches of specific clauses related to franchisee obligations, force majeure events lasting over 180 days, loss of required licenses, voluntary abandonment of the business, conviction of a serious offense, endangering public health or safety, fraud, or bankruptcy.
Prospective Chatime franchisees should carefully review the Franchise Agreement and MDA to understand what constitutes a curable versus a non-curable default. Understanding these conditions is crucial, as the difference could mean the ability to save the franchise versus immediate termination. Franchisees should also be aware of the specific clauses referenced as non-curable, such as those relating to franchisee obligations, to ensure compliance and avoid potential immediate termination.