Under what condition will a Chatime franchise agreement continue for the remainder of its term after a request for assignment or transfer?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) If Franchisor does not require an assignment or other transfer of this Agreement, then this Agreement may, as determined by Franchisor, continue for the remainder of its term, in which case Franchisee must continue to perform all obligations under this Agreement other than in relation to any continued development.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the franchise agreement may continue for the remainder of its term if Chatime does not require an assignment or other transfer of the agreement. In this case, the franchisee must continue to perform all obligations under the agreement, except those related to continued development.
This clause provides Chatime with the flexibility to maintain the existing franchise agreement under certain circumstances, rather than requiring a full assignment or transfer. This could occur if the franchisee is selling the business but Chatime is comfortable with the new owner and the existing agreement's terms.
For a prospective franchisee, this means that if they decide to sell their Chatime franchise, the continuation of the existing agreement is not guaranteed. It depends on Chatime's discretion. Franchisees should discuss with Chatime the conditions under which they would allow the agreement to continue versus requiring a new agreement with the assignee.