Besides assignment, under what conditions can Chesters terminate the franchise agreement?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to our termination rights in Section 18, we may terminate this Agreement, effective immediately upon delivery of notice to you, if you fail to comply with any provision of this Agreement or any other agreement or promissory note with us or our affiliates and you do not correct that failure within twenty (20) days after our delivery of notice of default.
If your default is by nature non-curable, we may terminate this Agreement without giving you any opportunity to cure.
You have no contractual right to terminate this Agreement.
The parties shall not be liable for any delay in or impairment of performance resulting in whole or in part from an event beyond the parties' reasonable control, including: natural disasters, fire, flood, severe weather, pandemic, disease epidemic, crop failure or lack of ingredients; embargoes, trade restrictions, or other acts of government; explosions, riots, wars, or acts of terrorism; strikes, lockouts, or labor disruptions; and shortages of transportation equipment, fuel, or labor (each, a "FME").
Notwithstanding anything to the contrary herein, if you are unable fulfill your obligations in this Agreement herein due to an FME, we agree to engage in good faith discussions to come to a mutually acceptable resolution; provided that if the parties are unable to mutually agree on a resolution within 45 days of entering into such discussions, we may terminate the Agreement effective immediately.
In no case may an FME last more than 180 days.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, Chesters can terminate the franchise agreement under specific conditions, in addition to assignment rights. Chesters may terminate the agreement effective immediately if the franchisee fails to comply with any provision of the agreement, or any other agreement or promissory note with Chesters or its affiliates, and does not correct that failure within 20 days after receiving notice of default.
If the franchisee's default is non-curable, Chesters can terminate the agreement without providing an opportunity to cure the default. Furthermore, if the franchisee is unable to fulfill their obligations due to a Force Majeure Event (FME), Chesters will engage in good faith discussions to find a resolution. However, if a mutually agreeable resolution is not reached within 45 days of starting discussions, Chesters can terminate the agreement immediately.
It is important to note that a Force Majeure Event cannot last more than 180 days. The franchisee does not have a contractual right to terminate the agreement. These termination conditions are typical in franchise agreements, as they protect the franchisor's brand and system standards, while also addressing unforeseen circumstances that may impact the franchisee's ability to operate the business.