Under what specific circumstances can Chatime terminate the agreement immediately upon 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 under specific circumstances. These circumstances include if the franchisee or guarantor breaches provisions related to initial and continuing fees, engaging in other business interests without approval, or violating conduct restraints.
Additionally, Chatime can immediately terminate the agreement if a force majeure event (unforeseeable circumstances) continues for more than 180 days. Immediate termination is also permitted if the franchisee no longer holds a required license to operate the franchised business or if the franchisee voluntarily abandons the business.
Furthermore, Chatime can terminate the agreement immediately if the franchisee or a guarantor is convicted of a serious offense, or if the franchised business is operated in a way that endangers public health or safety. These conditions provide Chatime with avenues to protect its brand and business interests by swiftly ending agreements with franchisees in cases of serious misconduct, abandonment, or circumstances that pose significant risks.