Does Chesters grant franchisees an exclusive territory?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
TERRITORY
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. You also do not have any type of non-exclusive territory. We and our affiliates have the right at all times during the franchise term to engage in any and all activities we deem appropriate, at any time or place and through any distribution channels we choose (such as the Internet, catalog sales, telemarketing, or other direct marketing sales). We need not pay you any compensation if we solicit or accept orders from any customers, regardless of their location.
If you operate a Restaurant-in-Store franchise, you will operate your Restaurant within your existing business premises. If you will operate a food court/strip mall franchise or other non-traditional franchise (such as at a sports arena or stadium), you will operate your Restaurant from a site you lease in a food court, strip mall, sports arena, or stadium. We have the right to terminate the Agreement if you fail to open the Restaurant within 180 days after the Agreement's effective date. You have the right to operate only from the accepted location and have no right to relocate within your existing business premises or elsewhere without our prior written permission. Whether we will permit relocation depends on the specific circumstances and what we consider to be in your Restaurant's and our system's best interests. We do not expect relocation to occur often because the Restaurant typically is located in your existing business premises. You are not
restricted from advertising away from your location if all sales are made at the location. You have the right, with our prior written approval, to solicit sales and orders from your franchised location for delivery to a remote location (including catering). You have no right to use other channels of distribution to make sales away from your location (such as the Internet, catalog sales, telemarketing, or other direct marketing sales) or in any territory.
Except as described below, neither we nor any affiliate has established, or presently intends to establish, other franchised or company-operated restaurants or another distribution channel (such as the Internet, catalog sales, telemarketing, or other direct marketing sales) selling or leasing similar products or services under a different trade name or trademark (although we have the right to do so, as noted above).
As described in Item 1 above, the First Chester's and Giles licensed retail operators operate restaurants or sell chicken products under the CHESTER FRIED Total Program. We are now the licensor of those Chester Fried Licensed Restaurants.
Source: Item 12 — TERRITORY (FDD pages 29–31)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Chesters franchisees do not receive an exclusive territory. The FDD states that franchisees may face competition from other franchisees, outlets that Chesters owns, other distribution channels, or competitive brands that Chesters controls. Chesters and its affiliates retain the right to engage in any activities they deem appropriate, at any time or place, and through any distribution channels they choose, such as the Internet, catalog sales, telemarketing, or other direct marketing sales.
This lack of an exclusive territory means that a Chesters franchisee could face direct competition from other Chesters locations or from Chesters itself through alternative sales channels. Chesters is not obligated to compensate franchisees if they solicit or accept orders from any customers, regardless of their location. This is a significant consideration for prospective franchisees, as it introduces a higher level of competitive risk compared to franchise systems that offer protected territories.
For franchisees operating a Restaurant-in-Store, food court/strip mall, or other non-traditional franchise, they are restricted to operating from the accepted location and cannot relocate without Chesters's prior written permission. While franchisees can advertise away from their location if all sales are made at the location, they cannot use other distribution channels to make sales away from their location or in any territory without written approval. This further limits the franchisee's control over their market and sales strategies.
Chesters also sells equipment to franchisees and has begun selling clothing and merchandise on the Internet. Additionally, BirdShack, an affiliate of Chesters, sells consumable products to food or equipment distributors or directly to restaurant operators that compete with Chesters franchisees. While these other operators will not use trademarks owned by Chesters or its affiliates (other than BirdShack), this still introduces competition from similar products. Prospective franchisees should carefully consider these competitive factors and evaluate the potential impact on their business before investing in a Chesters franchise.