Are Chatime's rights to indemnity affected if Chatime ends 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 indemnity is not affected if Chatime ends the franchise agreement. This means that even if Chatime terminates the franchise agreement, the franchisee's obligation to protect Chatime against losses, liabilities, and costs still applies. This protection extends to the Chatime Group, which includes Chatime's affiliates.
The franchisee must indemnify the Chatime Group against losses, liabilities, legal costs, and other expenses arising from various situations. These situations include breaches of the franchise agreement, injuries or property loss on the business premises, the franchisee's taxes or liabilities, negligent acts or omissions by the franchisee or their staff, and any incomplete, inaccurate, or misleading statements made by the franchisee.
This clause ensures that Chatime retains its right to seek compensation from the franchisee for specific issues, even after the franchise agreement has ended. This protection remains in effect regardless of whether Chatime ends the franchise, accepts the franchisee's rejection of the agreement, or due to any other circumstance. This is a standard practice in franchising, as it protects the franchisor from liabilities arising from the franchisee's actions, even after the business relationship has concluded.