Under what specific clauses can Chatime immediately terminate the agreement 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 Chatime's 2025 Franchise Disclosure Document, Chatime can terminate the franchise agreement immediately with written notice under specific circumstances. These circumstances include breaching provisions related to initial and continuing fees (clause 6), having other business interests without approval (clause 9.2), or violating conduct restraints in any capacity (clause 9.3).
Additionally, Chatime can immediately terminate the agreement if a force majeure event continues for more than 180 days, if the franchisee voluntarily abandons the Chatime business, or if the franchisee or a guarantor is convicted of a serious offense. Immediate termination is also possible if the Chatime business is operated in a way that endangers public health or safety, or if the franchisee engages in fraudulent activities related to the operation of the business.
For prospective franchisees, these immediate termination clauses highlight critical areas of compliance. Franchisees must ensure timely payment of fees, avoid unauthorized business interests, and maintain safe and honest business operations to avoid immediate termination. The inclusion of a 180-day clause for force majeure events also indicates a potential risk related to unforeseen and prolonged disruptions.