What warranty does the Developer provide to Chatime regarding their constitution?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
18.2 Warranties
- (1) If Developer is a corporate entity, Developer represents and warrants that it is duly organized and validly existing in good standing under the laws of the jurisdiction of its incorporation.
- (2) Developer warrants that it has done everything necessary to do business lawfully in all jurisdictions in which its business is carried on, and has the power to enter into and perform this Agreement and has obtained all necessary consents and fulfilled all necessary Legal Requirements to enable it to do so.
- (3) Developer and Guarantor represent and warrant that the terms and conditions of this Agreement have been explained to each of them by an independent legal adviser and an independent business adviser and that they understand and accept the terms and conditions of this Agreement.
- (4) If Developer and Guarantor are corporate entities, they represent and warrant that the execution of this Agreement is in accordance with the requirements of their respective articles of incorporation and creates a binding obligation on them in accordance with the terms of this Agreement.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if the Developer is a corporate entity, they provide specific warranties to Chatime. The Developer warrants that it is properly organized, validly existing, and in good standing under the laws of its incorporation's jurisdiction. This means Chatime requires assurance that the Developer is a legally recognized and compliant business entity.
Furthermore, the Developer warrants that it has taken all necessary actions to lawfully conduct business in all relevant jurisdictions. This includes having the power to enter into and fulfill the Development Agreement, as well as obtaining all necessary consents and meeting all legal requirements to enable them to do so. This protects Chatime by ensuring the Developer has the legal capacity and permissions to operate and develop Chatime stores.
If the Developer and Guarantor are corporate entities, they also warrant that the execution of the Development Agreement aligns with their respective articles of incorporation. They confirm that the agreement creates a binding obligation on them according to its terms. This provision ensures that the agreement is enforceable and that the Developer and Guarantor are legally bound to the terms outlined in the agreement.