After termination or non-renewal, is a Chatime franchisee allowed to use any trade name suggesting association with Chatime?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| h. n-curable defaults | FA: §15.3(4) | We may terminate your Franchise Agreement immediately upon written notice to you if (i) you or a guarantor breach any provision under Clauses 6, 9.2, or 9.3 of your Franchise Agreement, (ii) a force majeure event continues for more than 180 days, (iii) you no longer hold a license required to carry on your franchise business, (iv) you voluntarily abandon your franchise business, (v) you or a guarantor are convicted of a serious offense, (vi) your operations endanger public health or safety, (vii) you are fraudulent in connection with your operations or commit a fraud upon us, or (viii) you voluntarily petition in bankruptcy, are adjudicated a bankrupt or insolvent, or a receiver, manager, liquidator, or other person is appointed for a substantial part of your assets. |
|---|---|---|
| MDA: §13.3(4) | We may terminate your MDA immediately upon written notice to you if (i) you or a guarantor breach any provision under Clauses 6, 7.2, or 7.3 of your MDA, (ii) a force majeure event continues for more than 180 days, (iii) you no longer hold a license required to carry on your franchise business, (iv) you voluntarily abandon your multi-unit development business, (v) you or a guarantor are convicted of a serious offense, (vi) your operations endanger public health or safety, (vii) you are fraudulent in connection with your operations or commit a fraud upon us, or (viii) you voluntarily petition in bankruptcy, are adjudicated a bankrupt or insolvent, or a receiver, manager, liquidator, or other person is appointed for a substantial part of your assets. |
| i. Franchisee's obligations on termination/non-renewal | FA: §17 | Upon expiration or termination of your Franchise Agreement, you will immediately (i) cease directly or indirectly identifying yourself as a current or former franchisee, (ii) deliver to us all copies of the Operations Manual and Global Policies and Procedures, all forms of stationery, business cards, all advertising materials, original and all copies of databases and supplier lists, and all other property of ours, (iii) discontinue and forever cease use of the System name, the Trademarks, any trade name, trademark, or commercial symbol that suggests any association with us, and any of our confidential information and other Intellectual Property, (iv) remove all signage containing any of our trademarks or any marks deceptively similar to them, (v) execute all documents we require to transfer, assign, or cancel any trademarks, service marks, domain |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 43–52)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, upon expiration or termination of the Franchise Agreement, a franchisee must discontinue and forever cease use of the System name, the Trademarks, any trade name, trademark, or commercial symbol that suggests any association with Chatime. They must also cease using any of Chatime's confidential information and other Intellectual Property. This obligation is effective immediately upon termination or expiration of the agreement.
This means that a former Chatime franchisee cannot operate a similar business using a name, logo, or other branding that could lead customers to believe they are still affiliated with the Chatime brand. This restriction protects Chatime's brand identity and prevents confusion in the marketplace.
In practical terms, a franchisee must remove all Chatime signage, marketing materials, and any other items that display Chatime's trademarks or trade names. They must also change the name of their business to something completely different and unrelated to Chatime. This is a standard practice in franchising to ensure that terminated or non-renewed franchisees do not continue to benefit from the franchisor's brand recognition and goodwill.
Failure to comply with these requirements could result in legal action by Chatime to protect its intellectual property rights. Franchisees should carefully review the terms of the Franchise Agreement regarding termination and post-termination obligations to fully understand their responsibilities.