What constitutes a transfer of the Chesters franchise agreement requiring approval?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not transfer this Agreement without our prior written consent, which we may grant or withhold as we deem best.
If your controlling ownership interest or actual management control is transferred, or if you sell substantially all of your assets, that will be considered a transfer of this Agreement for purposes of our approval rights.
If such a transfer occurs without our approval, we may terminate this Agreement, effective immediately upon delivery of notice.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, a transfer of the franchise agreement requiring prior written consent from Chesters includes instances where the controlling ownership interest or actual management control is transferred. Additionally, selling substantially all of the assets also constitutes a transfer of the agreement, necessitating Chesters's approval.
Chesters retains the right to grant or withhold consent for any transfer of the franchise agreement, exercising this discretion as it deems best. Should a transfer occur without obtaining prior approval from Chesters, the company reserves the right to terminate the franchise agreement. This termination would be effective immediately upon delivering notice to the franchisee.
This clause is fairly standard in franchising, as franchisors want to ensure that any new owners or managers meet their standards and are capable of running the business effectively. It protects the brand and the interests of other franchisees. A prospective Chesters franchisee should carefully consider these conditions and understand the implications of transferring ownership or management control in the future.