Under what circumstances can Chatime immediately terminate the agreement with written notice?
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 the 2025 Chatime Franchise Disclosure Document, Chatime can terminate the franchise agreement immediately with written notice to the franchisee under specific circumstances. These circumstances include breaching provisions related to initial and continuing fees (clause 6), engaging in other business interests without approval (clause 9.2), or violating conduct restraints (clause 9.3).
Additionally, Chatime can immediately terminate the agreement if a force majeure event, as defined in clause 23, continues for more than 180 days. Immediate termination is also possible if the franchisee voluntarily abandons the franchised business or if the franchisee or a guarantor is convicted of a serious offense.
Furthermore, Chatime can terminate the agreement immediately if the franchised business is operated in a way that endangers public health or safety. These termination rights are in addition to Chatime's general right to terminate the agreement if the franchisee fails to remedy a breach of the agreement within a reasonable time after receiving written notice, as detailed in clause 15.3(1).
Prospective Chatime franchisees should carefully consider these conditions, as they represent situations where their franchise can be terminated without the opportunity to remedy the issue. Understanding these terms is crucial for assessing the risks and obligations associated with the Chatime franchise.