Does the Chesters FDD specify any conditions under which a franchisee can terminate the agreement?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
f ingredients; embargoes, trade restrictions, or other acts of government; explosions, riots, wars, or acts of terrorism; strikes, lockouts, or labor disruptions; and shortages of transportation equipment, fuel, or labor (each, a "FME"). Notwithstanding anything to the contrary herein, if you are unable fulfill your obligations in this Agreement herein due to an FME, we agree to engage in good faith discussions to come to a mutually acceptable resolution; provided that if the parties are unable to mutually agree on a resolution within 45 days of entering into such discussions, we may terminate the Agreement effective immediately.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, a franchisee's ability to terminate the franchise agreement is subject to specific conditions, and may also be impacted by state laws.
The FDD states that if a franchisee is unable to fulfill their obligations due to a Force Majeure Event (FME), both parties will engage in good faith discussions to find a resolution. However, if a mutually agreeable resolution cannot be reached within 45 days of starting these discussions, Chesters has the right to terminate the agreement immediately. The FDD stipulates that an FME cannot last more than 180 days.
Additionally, the Washington Addendum specifies that a franchisee may terminate the franchise agreement under any grounds permitted under state law. This suggests that state laws may provide franchisees with additional termination rights beyond those explicitly stated in the franchise agreement.
It is important for prospective franchisees to understand the specific conditions under which they can terminate the agreement, as well as any state laws that may provide additional rights. Franchisees should consult with a legal professional to fully understand their termination rights and obligations.