Does Chatime's right to indemnification change if the Franchisor terminates the franchise agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Franchisor's rights at law and under this Agreement, including its right to be indemnified under this clause, are not affected by:
- (a) Franchisor ending the Franchise or the termination of any Collateral Agreement;
- (b) Franchisor accepting Franchisee's repudiation of this Agreement or any related Agreement; or
- (c) Anything else.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime's right to indemnification is not affected if Chatime ends the franchise agreement. The franchisee must indemnify Chatime against losses, liabilities, legal costs, and other expenses resulting from the franchisee's breach of the agreement, any injury or loss of property on the business premises, the franchisee's taxes or costs, any negligent acts or omissions by the franchisee, or any incomplete, inaccurate, or misleading statements made by the franchisee.
This means that even if Chatime terminates the franchise agreement, the franchisee remains responsible for covering any losses or costs Chatime incurs due to the franchisee's actions or breaches of the agreement. This protection extends to Chatime's affiliates as well.
This clause protects Chatime from financial liabilities arising from the franchisee's conduct, even after the franchise relationship ends. Franchisees should be aware of this ongoing obligation and ensure they operate their business in compliance with the franchise agreement and all applicable laws to minimize the risk of incurring indemnification claims.