How long does Chatime have to remedy a breach of the franchise agreement after receiving notice from the franchisee?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| d. Termination by franchisee | FA: §15.1; §15.2 | You may terminate your Franchise Agreement if (i) you give us written notice of termination within seven days after execution, or (ii) you are in substantial compliance with the Franchise Agreement, we materially breach the Franchise Agreement, you notify us of such breach and give us at least 60 days to remedy the breach, we do not timely remedy the breach or we fail to show continuing efforts to correct the breach, and you provide 60 days' written notice of termination. These provisions are subject to state law. |
|---|---|---|
| g. Curable defaults | FA: §15.3(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. |
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, if a franchisee is in substantial compliance with the Franchise Agreement and Chatime materially breaches the agreement, the franchisee must notify Chatime of the breach and give Chatime at least 60 days to remedy it. If Chatime does not remedy the breach within that 60-day period or fails to show continuing efforts to correct the breach, the franchisee can then provide Chatime with an additional 60 days' written notice of termination.
For curable defaults under the Franchise Agreement, Chatime has 30 days after notice to cure the default. However, Chatime can terminate the Franchise Agreement immediately upon written notice to the franchisee if certain non-curable defaults occur. These include breaches of specific clauses related to confidentiality, non-competition, or financial obligations, as well as events like force majeure lasting over 180 days, loss of required licenses, voluntary abandonment of the franchise, convictions of serious offenses, endangering public health or safety, fraud, or bankruptcy.
These provisions outline the specific timeframes and conditions under which a Chatime franchisee can terminate the agreement due to Chatime's breach, as well as the time Chatime has to correct curable defaults. It also lists the conditions under which Chatime can immediately terminate the agreement. Prospective franchisees should carefully review these termination clauses to understand their rights and obligations.