From whom are Chesters franchisees required to purchase the Proprietary Goods?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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We license the Marks to certain unaffiliated suppliers to make and brand the proprietary seasonings and specially-formulated pre-prepared mixes (which includes breading, batter dip, and marinades), sauces, branded fresh and frozen poultry products, frozen potato wedges and paper products (which includes packaging, napkins, cups, and other products used in the operation of the Restaurant) (collectively, the "Proprietary Goods"). The suppliers then sell the Proprietary Goods to our designated distributors, and you must purchase the Proprietary Goods from one or more of our designated distributors.
We encourage you to purchase new equipment and fixtures for the Restaurant. We currently are the designated supplier for certain core equipment, signage, fixtures, and supplies (fryers, breading and batter table, hot display case, landing table, and oil-removal caddy) approved for use in the Restaurant. We currently sell the core equipment, signage, fixtures, and supplies at a bona fide wholesale price we set from time to time based in part on our current cost. If you obtain financing for core equipment, signage, fixtures, and supplies through Ascentium (see Item 10), the purchase price for core equipment, signage, fixtures, and supplies will be our then current bona fide wholesale price plus an additional 5% to 10% of the purchase price, which is roughly equivalent to the amount that Ascentium will deduct from their payment to us for the core equipment, signage, fixtures, and supplies as part of our arrangement to reduce the interest rate for the financing you obtain through Ascentium.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, franchisees must purchase Proprietary Goods from designated distributors. These Proprietary Goods include the proprietary seasonings and specially-formulated pre-prepared mixes (such as breading, batter dip, and marinades), sauces, branded fresh and frozen poultry products, frozen potato wedges, and paper products (including packaging, napkins, and cups). These goods are initially sold to designated distributors by suppliers who are licensed to use Chesters's Marks.
Chesters retains the right to limit suppliers of trade secret or proprietary food products to Chesters itself, its affiliates, and/or other specified exclusive sources. In such cases, franchisees are obligated to acquire these items exclusively from those designated sources at prices determined by them. This control allows Chesters to protect trade secrets, ensure quality and a reliable supply of products, secure favorable purchase and delivery terms, manage the use of its Marks by third parties, and oversee the manufacturing, packaging, processing, and sale of these items.
Chesters also emphasizes that franchisees must buy all food items, ingredients, equipment, furnishings, supplies, materials, and other items used or offered for sale at the Restaurant only from suppliers that meet Chesters's standards and specifications, have adequate quality controls and capacity, and have received Chesters's approval. While the cost of these items may vary due to factors like proximity to the supplier's distribution center and transportation costs, Chesters does not currently have a process for approving alternative suppliers, indicating a closed supply chain.