Can Chatime terminate the agreement immediately if the franchisee voluntarily abandons the business?
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:
- (a) The Defaulting Party breaches any provision under clause 6 (Initial and Continuing Fees), 9.2 (No Other Business Interests) or 9.3 (Restraint Applies to Conduct in Any Capacity).
- (b) A force majeure event (as referred to in clause 23) continues for more than 180 days;
- (c) Franchisee no longer holds a license that Franchisee must hold to carry on The Franchised Business;
- (d) Franchisee voluntarily abandons The Franchised Business;
- (e) Franchisee or a Guarantor is convicted of a serious offense;
- (f) The Franchised Business is operated in a way that endangers public health or safety;
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 voluntarily abandons the franchised business.
Specifically, Chatime can issue a written notice to the franchisee and terminate the agreement immediately. This is one of several conditions that allows Chatime to bypass the standard breach notification and cure period typically afforded to franchisees.
Other conditions that allow Chatime to terminate the agreement immediately include breaches of provisions related to initial and continuing fees, engaging in other business interests without approval, or operating the business in a way that endangers public health and safety. This immediate termination clause highlights the importance of adhering to the Franchise Agreement and maintaining operational standards to avoid losing the franchise.