Does the termination or expiration of the Chatime Franchise Agreement release a party from obligations that are capable of surviving the agreement?

According to Chatime's 2025 Franchise Disclosure Document, the termination of the Franchise Agreement by Chatime does not affect their right to be indemnified by the franchisee. This means that certain obligations, such as the franchisee's duty to cover losses, liabilities, legal costs, and expenses incurred by Chatime, continue even after the franchise agreement ends.

Specifically, the franchisee's responsibility to indemnify Chatime extends to situations arising from breaches of the agreement, injuries or property loss on the business premises, the franchisee's taxes and liabilities, negligent acts or omissions, and any misleading warranties or representations made by the franchisee. This obligation remains in effect regardless of whether Chatime terminates the franchise, accepts the franchisee's repudiation of the agreement, or any other event.

This clause ensures that Chatime is protected from financial repercussions resulting from the franchisee's actions or failures, even after the formal business relationship has concluded. Prospective franchisees should be aware that these indemnity obligations can have long-term financial implications, potentially requiring them to cover significant costs incurred by Chatime well beyond the termination date of the franchise agreement. It is common practice in franchising for certain obligations to survive the termination of an agreement to protect the franchisor's interests.