What is Chatime's requirement for notifying other parties of an anticipated delay caused by an event as described in clause 22.1?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- 22.1 A party (Affected Party) is not liable for any delay or failure to perform an obligation (other than to pay money) under this Agreement caused by:
- (1) Act of God;
- (2) War, terrorism, riot, insurrection, vandalism, or sabotage;
- (3) Strike, lockout, ban, limitation of work, or other industrial disturbance; or
- (4) Law, rule, or regulation of any government or governmental agency and executive or administrative order or act of general or particular application.
- 22.2 The Affected Party must notify each other party as soon as practical of any anticipated delay or failure caused by an event referred to in clause 22.1 (Event).
- 22.3 The performance of the Affected Party's obligation (other than to pay money) is suspended for the period of delay caused by the Event.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if an event described in clause 22.1 causes a delay or failure to perform an obligation (other than payment obligations) under the Franchise Agreement, the affected party must notify the other party. The notification must be done as soon as practical after the affected party anticipates the delay or failure. This clause refers to events such as acts of God, war, terrorism, riots, strikes, or changes in laws and regulations.
This means that if a Chatime franchisee anticipates being unable to fulfill their obligations due to a force majeure event, they must promptly inform Chatime. This allows both parties to understand the situation and potentially mitigate any negative impacts. The obligation to notify exists for any event that falls under the defined force majeure events, ensuring transparency and communication between the franchisee and franchisor during unforeseen circumstances.
This requirement is fairly standard in franchise agreements, as it allows for open communication and planning during disruptive events. However, the term "as soon as practical" is somewhat subjective. A prospective Chatime franchisee might want to clarify with the franchisor what specific timeframes or methods of communication would be considered acceptable to ensure compliance with this notification requirement.