Does the termination of the Development Agreement for a Chatime franchise affect obligations capable of surviving the end of the Development Business?

According to Chatime's 2025 Franchise Disclosure Document, the termination of the Franchise Agreement or any Collateral Agreement does not affect Chatime's rights at law and under the agreement, including its right to be indemnified. This means that even if the franchise or any related agreements are terminated, certain obligations of the franchisee, such as the duty to indemnify Chatime, may continue to apply.

Specifically, Chatime's rights are not affected by Chatime ending the Franchise or the termination of any Collateral Agreement, or Chatime accepting Franchisee's repudiation of this Agreement or any related Agreement. This ensures that Chatime retains its legal rights and protections even if the agreement is terminated early, regardless of the reason for termination.

For a prospective Chatime franchisee, this implies that certain obligations, particularly those related to indemnity, can extend beyond the termination of the franchise agreement. Therefore, it is crucial to understand the scope and implications of the indemnity clause and other surviving obligations before entering into a franchise agreement with Chatime. Franchisees should seek legal counsel to fully understand these obligations and their potential long-term impact.