Can Chatime require a general release from the franchisee or its owners as a condition for granting approval, consent, or agreeing to an amendment of the Chatime agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
e 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.
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 DEVELOPER
| By: | By: |
|---|---|
| Name: | Name: |
| Title: | Title: |
MARYLAND
MARYLAND ADDENDUM TO THE CHATIME FRANCHISE, LLC FRANCHISE DISCLOSURE DOCUMENT
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Bus. Reg. Code Ann. §14-201 et seq., the Chatime Franchise, LLC Franchise Disclosure Document for use in the State of Maryland will be amended as follows:
- Items 17(c) and 17(m), under the headings entitled "Requirements for Franchisee to Renew or Extend" and "Conditions for Franchisor Approval of Transfer," will be amended by the addition of the following language at the end of those sections:
However, a general release required as a condition of approval will not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
2.
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 and Minnesota franchisees clarify the use of general releases.
For Maryland, the FDD states that any general release required as a condition of renewal, sale, or transfer will not apply to liabilities arising under the Maryland Franchise Registration and Disclosure Law. This means that while Chatime may require a general release, it cannot prevent a franchisee from pursuing claims under Maryland franchise law.
Similarly, for Minnesota, the FDD indicates that any general release will not apply to any liability under the Minnesota Franchise Law. This ensures that Minnesota franchisees retain their rights under state franchise law, even if they sign a general release. Therefore, prospective franchisees should be aware of their state's specific laws regarding franchise agreements and general releases, as these laws can significantly impact their rights and obligations.