Does the restraint outlined in clause 9.2 of the Chatime franchise agreement apply to a franchisee acting as a consultant to another person?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
9.3 Restraint Applies to Conduct in Any Capacity
The agreement by Franchisee Parties in clause 9.2 applies to any of them, the Interested Parties, and those acting:
- (1) Either alone or in partnership or association with another person;
- (2) As principal, agent, representative, director, officer, employee, or financier;
- (3) As member, shareholder, debenture holder, note holder, or holder of any other security;
- (4) As trustee of or as a consultant or adviser to any person; or
- (5) In any other capacity.
9.4 Separate Restraint Agreements
Clauses 9.2 and 9.3 have effect as comprising each of the separate provisions which results from each combination of a capacity referred to in clause 9.3, a category of conduct referred to in clause 9.2, in the Restraint Area and for the Restraint Period. Each of these separate provisions operates concurrently and independently. If any separate provision is unenforceable, illegal, or void, that
provision is severed and the other separate provisions remain in force.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the restraint detailed in clause 9.2 applies to franchisees acting as consultants or advisors to any person. Clause 9.3 of the franchise agreement explicitly states that the restrictions apply not only to the franchisee but also to those acting as a consultant or advisor.
This means that a Chatime franchisee is restricted from engaging in activities that would violate clause 9.2, even if they are doing so in a consulting or advisory capacity for another individual or entity. This broad application of the restraint aims to prevent franchisees from using their knowledge and experience gained from the Chatime franchise to benefit a competing business or activity.
The FDD also clarifies that each capacity listed in clause 9.3, including acting as a consultant, is considered a separate provision that operates concurrently and independently. Therefore, if any single provision is deemed unenforceable, illegal, or void, it can be removed without affecting the validity of the remaining provisions. This ensures that the overall intent of the restraint remains intact and enforceable to the fullest extent possible.