What is the condition for Chesters to charge for the costs and expenses incurred in conducting a restaurant readiness review?

According to Chesters's 2025 Franchise Disclosure Document, Chesters may charge a franchisee for the costs and expenses incurred in conducting a restaurant readiness review if Chesters determines, in its sole judgment, that it must undertake more than one restaurant readiness review for the franchisee's restaurant. This means that the initial restaurant readiness review is included in the franchise agreement, but any subsequent reviews deemed necessary by Chesters will be charged to the franchisee.

This condition is important for prospective franchisees to consider because it introduces a potential for additional, uncapped expenses during the restaurant development phase. The FDD does not specify how much these costs and expenses could be, leaving franchisees potentially vulnerable to significant charges if their restaurant does not pass the initial readiness review. The franchisee is responsible for ensuring the restaurant complies with the Chesters system, applicable laws, and lease requirements, so any deficiencies could trigger additional reviews and associated costs.

Franchisees should strive to pass the initial restaurant readiness review to avoid these extra costs. This requires careful attention to detail during the development and construction phase, ensuring all plans and specifications meet Chesters' requirements. It would be prudent for a prospective franchisee to inquire with Chesters about the typical cost of a restaurant readiness review and the most common reasons why a restaurant might fail the initial review. Understanding these factors can help franchisees budget appropriately and proactively address potential issues, thereby minimizing the risk of incurring additional expenses.