Can Chatime temporarily operate the Franchised Business as a remedy for franchisee default?

According to Chatime's 2025 Franchise Disclosure Document, Chatime has the right, but not the obligation, to appoint a manager for the Franchised Business if, in their judgment, the Franchised Business is not being managed properly. This is pending the appointment and training of a new Managing Owner or Operating Manager. The franchisee is required to pay for this manager as described in clause 14 of the agreement.

This clause provides Chatime with a mechanism to ensure the continued operation and brand integrity of the franchise, even if the franchisee is not fulfilling their management responsibilities. This can be seen as a protective measure for the Chatime network, ensuring that individual store performance doesn't negatively impact the overall brand reputation.

For a prospective franchisee, this means that Chatime can step in and take control of the business operations if they deem the management to be inadequate. The franchisee will be responsible for covering the costs associated with this appointed manager. It is important for potential franchisees to understand the conditions under which Chatime might exercise this right and to budget accordingly for the potential expense of a manager appointed by Chatime.