What is the amount of the liquidated brand damages fee for Chesters, and when is it due?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of fee* | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnification | Will vary under circumstances | As incurred | You must reimburse us if we are held liable for claims from your Restaurant’s operation or incur costs in defending them. |
| Liquidated Brand Damages | $10,000 | As incurred | Due if you or your owners violate non-competition restrictions described in Items 17(q) and (r). |
| De-Branding Fee | $10,000 | As incurred Payment is due by credit card or automatic debit | Due if you do not comply with payment and Restaurant-specific physical de-branding obligations within 14 business days after Agreement expires or is terminated. |
Source: Item 6 — OTHER FEES (FDD pages 14–16)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the liquidated brand damages fee is $10,000. This fee is incurred if a franchisee or their owners violate the non-competition restrictions outlined in Items 17(q) and (r) of the FDD.
The liquidated brand damages fee is due as incurred. This means that the fee becomes payable at the time the violation of the non-competition restrictions occurs.
Non-competition agreements are common in franchising to protect the brand and prevent franchisees from opening competing businesses nearby, especially after the franchise agreement ends. Franchisees should carefully review Items 17(q) and (r) of the Chesters FDD to fully understand the scope of these non-competition restrictions and avoid incurring this $10,000 fee.