What is the Chesters franchisee's responsibility regarding the payment of the pro-rated payment?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: **RECEIPTS]
Payment is due by credit card or ACH transfer.
You also must pay us a POS Technology Fee if during this Agreement's term we require you to obtain the Chester's POS System for the Restaurant as part of its required operating equipment.
We may increase this POS Technology Fee upon 90 days' prior written notice to you, although the monthly fee will not exceed $350.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
Based on the 2025 FDD, Chesters franchisees are responsible for making various payments to the franchisor, and these payments are generally due via credit card or ACH transfer. While the FDD mentions several fees, such as a $3,500 training fee, marketing support fees that can reach up to $325 per quarter, and POS technology fees that could be between $250 and $325 monthly, it does not specifically detail any 'pro-rated payment' responsibilities.
However, the document does state that if a franchisee violates the restriction on operating a competitive business, they must pay liquidated damages of $10,000. Additionally, if a franchisee fails to comply with de-branding obligations after the agreement expires or is terminated, they must pay a $10,000 fee. There is also a $300 fee for each required revisit if the restaurant fails inspection surveys. All these payments are due by credit card or ACH transfer.
Since the term 'pro-rated payment' is not explicitly defined in the provided FDD excerpts, it is important for potential Chesters franchisees to seek clarification from the franchisor regarding any potential fees that may be pro-rated, how they are calculated, and under what circumstances they would be applied. Understanding all payment obligations is crucial before entering into a franchise agreement.