What is the amount of the liquidated 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 damages are due as incurred, meaning that the franchisee must pay the $10,000 when the violation of the non-competition restrictions occurs. This fee is separate from other fees such as the Indemnification and De-Branding Fee, which are also listed as 'as incurred'.
Prospective franchisees should carefully review Items 17(q) and (r) of the Chesters FDD to fully understand the non-competition restrictions that trigger this liquidated damages fee. Understanding these restrictions is crucial to avoid unintentionally incurring this $10,000 charge.