Can Chatime remove a franchisee from its website as a remedy for default?
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, Chatime has the right to remove a franchisee from its website, directory, or social media as a remedy for default. This is one of several options Chatime may exercise instead of or before terminating the franchise agreement. Other remedies Chatime can pursue include terminating or suspending services to the franchisee, suspending product deliveries, changing credit terms, temporarily operating the franchise, requiring a release, and imposing additional requirements for the franchisee to continue operating.
This means that if a Chatime franchisee is in default, Chatime can choose to remove the franchisee's listing from its website as a way to address the issue without immediately terminating the agreement. This action does not waive Chatime's right to pursue other remedies, including termination, in the future.
For a prospective franchisee, this clause indicates that Chatime has various tools to manage franchisees who are not meeting their obligations. Website removal could signal to potential customers or investors that the franchisee is not in good standing with the brand. It is important for franchisees to maintain compliance with the franchise agreement to avoid such actions, which could negatively impact their business.