Can Chatime require a release from the franchisee and its owners as a condition for granting approval, consent, or agreeing to amend the Franchise 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 Chatime's 2025 Franchise Disclosure Document, the franchisor's ability to require a release from the franchisee and its owners as a condition for granting approval, consent, or agreeing to amend the Franchise Agreement is subject to certain state laws. Specifically, amendments for Maryland and Minnesota franchise agreements address this issue.
For Maryland franchisees, the Maryland Addendum to the Chatime Franchise Disclosure Document states that any general release required as a condition of approval for renewal or transfer will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This means that while Chatime may require a general release, this release cannot waive the franchisee's rights under Maryland franchise law.
Similarly, for Minnesota franchisees, the Minnesota Addendum to the Chatime Franchise Disclosure Document specifies that any general release will not apply to any liability under the Minnesota Franchise Law. This ensures that Minnesota franchisees do not waive their rights under Minnesota franchise law when a general release is required for approval of transfer or other actions. Therefore, Chatime's ability to enforce a release is limited by these state-specific protections for franchisees.