What is considered a 'Competitive Business' for a Chesters franchise?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
In this Agreement, the term "Competitive Business" means any (a) business preparing and selling to customers breaded chicken products or the other types of products (e.g., "sides" such as potato wedges) that we require the Restaurant to prepare and sell as of the Effective Date, including, but not limited to, such businesses as Charley Biggs, Champs Chicken, Krispy Krunchy Chicken, Cooper's Express, Broaster Chicken, and Chicken King, (b) business that includes a "Restaurant-in-Store" unit where the Restaurant-in-Store unit derives more than twenty-percent (20%) of its revenue from selling chicken, or (c) business granting franchises or licenses to others to operate the types of businesses described in clauses (a) or (b), other than a CHESTER'S Restaurant operated under an agreement with us.
During this Agreement's term, you agree that neither you nor your owners will have any direct or indirect, controlling or non-controlling interest as an owner in, or perform services as a director, officer, manager, employee, consultant, representative, or agent for, a Competitive Business at the Location or within a five (5)-mile radius from the Location.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, a 'Competitive Business' is defined in three ways. First, it includes any business that prepares and sells breaded chicken products or similar side items that Chesters requires its restaurants to sell. This includes specific businesses like Charley Biggs, Champs Chicken, Krispy Krunchy Chicken, Cooper's Express, Broaster Chicken, and Chicken King.
Second, a 'Competitive Business' is any business that operates a 'Restaurant-in-Store' unit where more than 20% of its revenue comes from selling chicken. This clause is likely intended to prevent franchisees from operating a Chesters within another business (like a gas station or convenience store) and then opening a competing chicken business within the same location.
Third, the definition extends to any business that grants franchises or licenses to others to operate businesses similar to the ones described above, excluding other Chesters restaurants operating under an agreement with Chesters. This broad definition aims to prevent franchisees from investing in or operating competing chicken franchises or licensing similar concepts. During the franchise term, franchisees and their owners are prohibited from having any direct or indirect interest in, or performing services for, a Competitive Business at the Chesters location or within a 5-mile radius.