Can Chatime rely on the power of attorney if the franchisee does not perform their obligations?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
eral or particular application.
- 22.2 The Affected Party must notify each other party as soon as practical of any anticipated delay or failure caused by an event referred to in clause 22.1 (Event).
- 22.3 The performance of the Affected Party's obligation (other than to pay money) is suspended for the period of delay caused by the Event.
23 Power of Attorney
- (1) To secure performance by Franchisee of its obligations under this Agreement, Franchisee Parties irrevocably appoint Franchisor and each of its officers severally to be their attorney (Attorney) to exercise the powers described in this clause 23.
- (2) If Franchisee Parties breach any provision of this Agreement or any Collateral Agreement or at the end of the Franchise the Attorney may, in the name and at the Cost of either
Franchisee or Guarantor, do anything required to be done by Franchisee Parties that Franchisee Parties have not done or have not done promptly or properly. This includes the execution and delivery of documents, transfers, assignments, deeds, forms, notices, or other instruments specifically relating to the Marks and the Website.
- (3) The powers granted under this clause 23 commence when this Agreement is executed and continue despite the end of the Franchise.
- (4) Franchisee Parties:
- (a) Ratify and confirm anything an Attorney lawfully does under this clause 23; and
- (b) Must pay on demand all the Costs or other liabilities incurred by or on behalf of Franchisor or the Attorney under this clause 23.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime can utilize the power of attorney if a franchisee fails to meet their obligations under the franchise agreement. Specifically, to secure the franchisee's performance, the franchisee irrevocably appoints Chatime and its officers as their attorney to exercise certain powers.
If the franchisee breaches any part of the agreement, the attorney (Chatime) can act on behalf of the franchisee to fulfill those obligations. This includes executing and delivering documents, transfers, assignments, deeds, forms, notices, or other instruments, especially those related to Chatime's trademarks and website. The power of attorney begins when the agreement is signed and continues even after the franchise ends.
The franchisee is obligated to ratify and confirm any actions the attorney takes lawfully under this power of attorney. Additionally, the franchisee must cover all costs or liabilities that Chatime incurs while acting as the attorney. This clause ensures that Chatime has a mechanism to enforce the agreement and protect its brand and system, even if the franchisee is unwilling or unable to do so themselves.
However, Chatime may also choose to remedy the default without relying on the power of attorney. The franchise agreement states that if a franchisee does not perform any obligation, Chatime may, but does not have to, remedy that default. In doing so, Chatime is entitled to rely on the power of attorney.