Can Chesters compete with its own franchisees through company-owned outlets?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. You also do not have any type of non-exclusive territory. We and our affiliates have the right at all times during the franchise term to engage in any and all activities we deem appropriate, at any time or place and through any distribution channels we choose (such as the Internet, catalog sales, telemarketing, or other direct marketing sales). We need not pay you any compensation if we solicit or accept orders from any customers, regardless of their location.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Chesters franchisees may face competition from company-owned outlets. Item 12 of the FDD clearly states that franchisees will not receive an exclusive territory. This means that Chesters and its affiliates retain the right to engage in any activities they deem appropriate, at any time or place, and through any distribution channels they choose. This includes the possibility of establishing company-operated restaurants that compete directly with franchisees.
Chesters does not need to provide any compensation to franchisees if they solicit or accept orders from any customers, regardless of the customer's location. This lack of territorial exclusivity is a significant consideration for prospective franchisees. It means that Chesters could open a competing location nearby, or utilize other distribution methods like internet sales, without offering any financial relief to the franchisee.
Furthermore, Chesters and its affiliate, BirdShack, can sell consumable products and equipment to other food-service operators who compete with Chesters franchisees, as long as those operators do not use Chesters' trademarks (other than BirdShack). While Chesters states they will use reasonable efforts to resolve conflicts, the lack of an exclusive territory places the risk of competition squarely on the franchisee. This is a fairly common practice in the franchise industry, but the degree of potential competition should be carefully evaluated by anyone considering investing in a Chesters franchise.