What representation must the Chatime franchisee and guarantor make regarding independent legal and business advice?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Exhibit 4; and
- (e) In any case, the change does not adversely affect Franchisee's ability to perform its obligations under this Agreement.
19.5 Transfer of Ownership Interests
Any Disposal of Ownership Interests in Franchisee must be treated as a Disposal by Franchisee of the Franchise and clause 13 will apply to that Disposal.
20 Acknowledgements, Representations, and Warranties
20.1 Acknowledgements and Representations
- (1) Franchisee and Guarantor each acknowledge that:
- (a) They have relied upon their own investigations and judgment in entering this Agreement;
- (1) Franchisee and Guarantor each acknowledge that:
(b) Before signing this Agreement, they have undertaken their own due diligence and sought such professional advice and assistance as they consider appropriate in relation to Franchisor and all other matters relevant to this Agreement;
(c) They are not entering into this Agreement on the basis of any financial
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, both the franchisee and any guarantor must acknowledge that they have relied on their own investigations and judgment when entering into the franchise agreement. This means Chatime wants to ensure franchisees and guarantors aren't claiming they were pressured or misled into signing.
Specifically, the franchisee and guarantor must confirm they undertook their own due diligence and sought professional advice and assistance that they considered appropriate regarding Chatime and all other relevant matters related to the agreement. This includes seeking legal and business advice. This acknowledgement protects Chatime from future claims that the franchisee or guarantor didn't understand the agreement or were not fully informed.
Furthermore, the franchisee and guarantor must acknowledge that they are not entering into the agreement based on any financial or other information provided by Chatime or any representations made by Chatime or its affiliates, officers, employees, agents, or representatives. They also confirm they were not introduced to Chatime by any broker or agent acting on Chatime's behalf. This reinforces the idea that the franchisee and guarantor are making an informed decision based on their own independent assessment and not solely on information provided by Chatime.