What are some examples of non-curable defaults for a Chesters franchisee?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| h. | “Cause” defined – non-curable defaults | 11, 18, and 19 of Agreement | Unapproved transfers and third failed in- Restaurant inspection are not curable defaults. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 35–38)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, certain defaults by a franchisee cannot be corrected, leading to termination of the franchise agreement. These non-curable defaults, as outlined in Sections 11, 18, and 19 of the agreement, include unapproved transfers of the franchise and a third failed restaurant inspection.
An 'unapproved transfer' typically refers to transferring ownership or control of the franchise without obtaining prior authorization from Chesters. This could involve selling the franchise to someone else or changing the management structure. The franchisor maintains the right to approve or deny such transfers.
A 'third failed restaurant inspection' indicates a serious and persistent failure to meet Chesters's standards for health, safety, and operational quality. Receiving three failing grades suggests significant issues that the franchisee has not adequately addressed. Because these defaults are considered severe and reflect a fundamental breach of the franchise agreement, Chesters does not offer an opportunity to correct them, and termination may occur.