Does a Chesters franchisee need approval to transfer the Franchise Agreement?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| k. | "Transfer" by franchisee – defined | 18 of Agreement | Includes transfer of Agreement, your controlling ownership interest, and your actual management control. |
| l. | Franchisor approval of transfer by franchisee | 18 of Agreement | You have no right to transfer without our prior written consent, which we have the right to grant or withhold as we deem best. |
| m. | Conditions for franchisor approval of transfer | 18 of Agreement | The Agreement does not specify any transfer conditions you must satisfy; we have the right to grant or withhold approval of a proposed transfer as we deem best. |
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, a franchisee is required to obtain prior written consent from Chesters to transfer the Franchise Agreement. Chesters retains the right to grant or withhold this approval based on their own discretion. The FDD specifies that 'transfer' includes the transfer of the agreement itself, the franchisee's controlling ownership interest, and the franchisee's actual management control.
This requirement means that a Chesters franchisee cannot sell their franchise to a third party, transfer ownership within their existing business structure, or change the management of their restaurant without Chesters's explicit permission. This gives Chesters significant control over who operates their franchises and ensures that new operators meet their standards.
Furthermore, the Chesters Franchise Agreement does not specify any particular conditions that a franchisee must meet for a transfer to be approved. Chesters has the right to grant or withhold approval of a proposed transfer as they deem best. This lack of specified conditions introduces uncertainty for franchisees looking to sell, as there are no defined criteria to ensure a smooth transfer process. A prospective franchisee should seek clarification from Chesters regarding the specific factors they consider when evaluating a transfer request.