What is the range of reasonable time Chatime must give the Defaulting Party to remedy a breach?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Franchisor may terminate this Agreement if:
- (a) Franchisee or Guarantor (Defaulting Party) breaches any provision of this Agreement or any Collateral Agreement;
- (b) Franchisor gives to the Defaulting Party a written notice that:
- (i) Specifies the breach;
- (ii) Tells the Defaulting Party what Franchisor wants the Defaulting Party to do to remedy the breach;
- (iii) Gives the Defaulting Party a reasonable time (which can be any number of days between 3 days and 30 days) to remedy the breach; and
- (iv) States that Franchisor proposes to terminate this Agreement and the Franchise if the breach is not remedied within that time; and
- (c) the Defaulting Party does not remedy the breach within the time allowed by a notice issued under clause 15.3(1)(b).
- (2) If the breach is remedied in accordance with, and within the time allowed by, a notice issued under clause 15.3(1)(b), Franchisor cannot terminate this Agreement because of that breach.
- (3) If Franchisee does not perform or observe any obligation under this Agreement Franchisor may, but does not have to, remedy that default. In doing so, Franchisor is entitled to rely on the power of attorney in clause 24.
- (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, if a franchisee or guarantor (referred to as the Defaulting Party) breaches the agreement, Chatime must provide written notice specifying the breach and what is required to fix it. Chatime must then give the Defaulting Party a reasonable time to remedy the breach, which can be anywhere from 3 to 30 days. The notice will also state that Chatime intends to terminate the agreement if the breach is not resolved within the given timeframe.
If the Defaulting Party fixes the breach within the specified time, Chatime cannot terminate the agreement due to that particular breach. However, if the breach is not remedied within the allowed time, Chatime has the right to proceed with terminating the franchise agreement.
It is important to note that Chatime can terminate the agreement immediately under certain circumstances, such as a breach of clauses related to initial and continuing fees, engaging in other business interests without approval, or violations of conduct restrictions. Immediate termination can also occur if a force majeure event continues for more than 180 days, the franchisee abandons the business, or if the franchisee or a guarantor is convicted of a serious offense, or if the franchised business is operated in a way that endangers public health or safety.