Can Chatime terminate the agreement immediately if the franchisee or guarantor is convicted of a serious offense?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) Notwithstanding any other provision in this clause 15, Franchisor may terminate this Agreement immediately upon written notice to Franchisee if:
- (e) Franchisee or a Guarantor is convicted of a serious offense;
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime can terminate the franchise agreement immediately if the franchisee or their guarantor is convicted of a serious offense. Chatime will provide written notice to the franchisee in this event.
This clause means that a franchisee's or guarantor's criminal conviction can have severe consequences, potentially leading to the immediate loss of the franchise. Franchisees should ensure that they and their guarantors maintain a clean legal record to avoid triggering this termination clause.
This type of clause is relatively common in franchise agreements, as franchisors want to protect their brand and reputation from any negative impact due to criminal activity by franchisees or their associates. Prospective franchisees should carefully consider this provision and understand the potential ramifications of a criminal conviction.