conditional

Can Chatime require a franchisee to sign a release as a condition for granting approval, consent, or an amendment to the Franchise Agreement?

Chatime Franchise · 2025 FDD

Answer from 2025 FDD Document

it F to the Franchise Disclosure Document (Acknowledgement Addendum to Franchise Agreement) is deleted. Franchisee and its principals are not required to complete and sign the Acknowledgement Addendum.

    1. No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

MARYLAND AMENDMENT TO THE CHATIME FRANCHISE, LLC FRANCHISE AGREEMENT

In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Bus. Reg. Code Ann. §14-201 et seq., the parties to the attached Chatime Franchise, LLC Franchise Agreement (the "Franchise Agreement") agree as follows:

  1. Clauses 2.6(3)(h) and 26.2 of the Franchise Agreement, entitled "Options for New Term," and "Governing Law and Jurisdiction," will be amended by the addition of the following at the end of the clauses:

"The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law."

  1. Clause 16.3 of the Franchise Agreement is amended to add the following:

"This franchise agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Mayland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable."

  1. Clause 25.12 of the Franchise Agreement, entitled "Entire Understanding," will be amended by the addition of the following at the end of the clause:

"Nothing in this Agreement or any other agreement is intended to disclaim Franchisor's representations in Franchisor's Franchise Disclosure Document."

  1. Clause 25.1 of the Franchise Agreement, entitled "Choice of Law," will be amended by the addition of the following at the end of the clause:

"Notwithstanding the above, Maryland franchisees are permitted to bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law."

    1. Clauses 20.1(1), (2), and (3), and 20.2(3) of the Franchise Agreement are deleted.
    1. No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in

connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

  1. Each provision of this Amendment will be effective only to the extent that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law, with respect to each such provision, are met independently of the Amendment. This Amendment will have no force or effect if such jurisdictional requirements are not met.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed, and delivered this Amendment to the Franchise Agreement on the same date as that on which the Franchise Agreement was executed.

CHATIME FRANCHISE, LLC FRANCHISEE
------------------------------ ------------
By: By:
Name: Name:
Title: Title:

MARYLAND AMENDMENT TO THE CHATIME FRANCHISE, LLC MULTI-UNIT DEVELOPMENT AGREEMENT

In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Bus. Reg. Code Ann. §14-201 et seq., the parties to the attached Chatime Franchise, LLC Multi-Unit Agreement (the "Multi-Unit Development Agreement") agree as follows:

    1. Clause 2.7(3)(h) of any Multi-Unit Development Agreement, will be amended by the addition of the following at the end of the clauses:
    • "The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law."
    1. Clause 14.3 of the Multi-Unit Development Agreement is amended to add the following:
    • "This franchise agreement provides that disputes are resolved through arbitration. A Maryland franchise regulation states that it is an unfair or deceptive practice to require a franchisee to waive its right to file a lawsuit in Mayland claiming a violation of the Maryland Franchise Law. In light of the Federal Arbitration Act, there is some dispute as to whether this forum selection requirement is legally enforceable."
    1. Clauses 18.1(1), (2) and (3), and 18.2(3) of the Multi-Unit Development Agreement are deleted.
    1. No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
    1. Each provision of this Amendment will be effective only to the extent that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law, with respect to each such provision, are met independently of the Amendment. This Amendment will have no force or effect if such jurisdictional requirements are not met.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed, and delivered this Amendment to the Multi-Unit Development Agreement on the same date as that on which the Franchise Agreement was executed.

CHATIME FRANCHISE, LLC MULTI-UNIT DEVELOPER

By: By:
Name: Name:
Title: Title:

MINNESOTA

MINNESOTA ADDENDUM TO THECHATIME FRANCHISE, LLC FRANCHISE DISCLOSURE DOCUMENT

In recognition of the requirements of the Minnesota Franchise Act, Minn. Stat.

Source: Item 23 — Receipts (FDD pages 58–262)

What This Means (2025 FDD)

According to the 2025 Chatime Franchise Disclosure Document, the franchisor's ability to require a general release from franchisees is limited by certain state laws. Specifically, amendments for Maryland, New York, and Minnesota franchise agreements clarify the extent to which general releases are enforceable.

In Maryland, the FDD states that any general release required as a condition of approval for renewal, sale, or transfer will not apply to liabilities arising under the Maryland Franchise Registration and Disclosure Law. This means Chatime franchisees in Maryland cannot be forced to waive their rights under Maryland franchise law through a general release.

Similarly, in New York, the FDD indicates that franchisees are entitled to all rights and causes of action arising from the provisions of Article 33 of the General Business Law of the State of New York, and the regulations issued thereunder. The intent is to satisfy the non-waiver provisions of General Business Law §§687.4 and 687.5. Furthermore, no statement, questionnaire, or acknowledgement signed by a franchisee in connection with the commencement of the franchise relationship can waive claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by the franchisor.

For Minnesota, the FDD specifies that any general release will not apply to any liability under the Minnesota Franchise Law. Additionally, Minnesota law prohibits Chatime from requiring litigation to be conducted outside of Minnesota, and nothing in the Disclosure Document or Franchise Agreement can reduce a franchisee's rights as provided for in Minn. Stat. §80C, or their rights to any procedure, forum, or remedies provided by Minnesota law. Therefore, Chatime franchisees should be aware of their rights under these state-specific amendments, which protect them from waiving certain legal claims or rights through general releases required by Chatime.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.