Under what condition can Chatime rescind its election to acquire a leasehold interest?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
If Landlord may not legally obtain possession of the Leased Premises or if Landlord is unable to deliver the Leased Premises to Franchisor within six (6) months from the date Franchisor notifies Landlord of its election to continue the use of the Leased Premises, then Franchisor shall have the right at any time thereafter to rescind its election to acquire a leasehold interest in the Leased Premises and to terminate the Lease or any new lease between it and Landlord for the Leased Premises, and Landlord shall release Franchisor from all of its obligations under the Lease or any new lease.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime has the right to rescind its election to acquire a leasehold interest in the leased premises under specific conditions related to obtaining possession of the premises.
Specifically, if the landlord is unable to legally obtain possession of the leased premises, or if the landlord cannot deliver the leased premises to Chatime within six months from the date Chatime notifies the landlord of its election to continue using the leased premises, Chatime has the right to rescind its election.
In such a case, Chatime can terminate the lease or any new lease agreement between itself and the landlord for the leased premises. Furthermore, the landlord is obligated to release Chatime from all obligations under the lease or any new lease agreement. This provision protects Chatime from being bound to a lease agreement if the premises cannot be made available within a reasonable timeframe.