What other remedies does Chatime have in the event of a default by the franchisee, besides termination?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.4 Other Remedies. In the event of grounds for a default by the Franchisee, Franchisor is entitled in its sole discretion to exercise any other remedies in lieu of or prior to terminating the Agreement, which may include but are not limited to termination or suspension of any and all services provided to Franchisee by Franchisor, its Affiliates, or approved suppliers; suspension of delivery of product or supplies to Franchisee by Franchisor, its Affiliates, or approved suppliers; imposition of different credit terms for delivery of product or supplies to Franchisee by Franchisor, its Affiliates or approved suppliers; temporary operation of the Franchised Business pursuant to Section 14 of this Agreement; removal of Franchisee from the Franchisor's website, directory, or social media; execution and delivery of a Release in the form attached as Exhibit 1, and imposition of any additional or different requirements for Franchisee to maintain its right to continue operating the Franchised Business. Franchisor's exercise of any of these other remedies shall not in any way impair or waive Franchisor's right in the future to terminate the Agreement or to exercise any other rights under this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, in the event of a default by the franchisee, Chatime has several remedies available in addition to terminating the agreement. These remedies are at Chatime's sole discretion and can be exercised instead of or before termination. These include terminating or suspending any and all services provided to the franchisee by Chatime, its affiliates, or approved suppliers. Chatime can also suspend the delivery of products or supplies to the franchisee from Chatime, its affiliates, or approved suppliers.
Additionally, Chatime may impose different credit terms for the delivery of products or supplies. Chatime has the option to temporarily operate the franchised business. Chatime can also remove the franchisee from Chatime's website, directory, or social media. Chatime may also require the franchisee to execute and deliver a release in a specified form and impose additional or different requirements for the franchisee to maintain its right to continue operating the franchised business.
It is important to note that Chatime's exercise of any of these other remedies does not waive its right to terminate the agreement or exercise any other rights under the agreement in the future. This provides Chatime with flexibility in addressing franchisee defaults, allowing them to take corrective actions without immediately resorting to termination, while still preserving their right to terminate the agreement if necessary.