What are some examples of non-curable defaults that could lead to termination of a Chesters franchise agreement?
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 are considered non-curable, meaning the franchisee does not have an opportunity to fix the issue before the franchise agreement is terminated. These non-curable defaults are outlined in Sections 11, 18, and 19 of the franchise agreement.
Specifically, the FDD identifies two instances that constitute non-curable defaults: unapproved transfers of the franchise and a third failed restaurant inspection. An unapproved transfer likely refers to transferring ownership or control of the franchise without obtaining prior authorization from Chesters. The consequence of such an action is immediate termination, as the franchisee is not given a chance to rectify the unapproved transfer. Similarly, if a Chesters restaurant fails a third inspection, this is also considered a non-curable default, leading to termination.
Prospective franchisees should carefully review Sections 11, 18, and 19 of the franchise agreement to fully understand the implications of these non-curable defaults. Understanding what constitutes an 'unapproved transfer' and the specific criteria for restaurant inspections is crucial to avoid potential termination of the Chesters franchise agreement. Franchisees should also inquire about the details of the inspection process and the specific consequences of failing inspections to fully understand their obligations and potential risks.