If a Chesters franchisee fails to comply with the payment and Restaurant-specific physical de-branding obligations within 30 business days, what is the amount of the fee they must pay?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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. In no case may an FME last more than 180 days.
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- Post-Term Obligations. When this Agreement expires or is terminated, you must immediately stop operating the Restaurant under the Chester's System and Marks; not thereafter represent to the public or hold yourself out as a present or former licensee of ours; immediately and permanently stop using any confidential methods, procedures, and techniques associated with the Chester's System and Marks; follow our instructions to de-identify the Restaurant from the Chester's System within the timeframe we specify; promptly pay all monies due to us and our affiliates; immediately deliver to us (at no cost to us) all Manuals, brochures, invoices, and other materials bearing the Marks. You will have 30 business days to show that you have completed all payment and Restaurant-specific physical de-branding obligations (the other obl
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, a franchisee who fails to meet their payment and restaurant-specific physical de-branding obligations within 30 business days after the termination or expiration of their franchise agreement will be assessed a $10,000 fee. These obligations include stopping operations under the Chesters system and marks, ceasing use of confidential methods, de-identifying the restaurant, paying all monies due, and delivering materials bearing the marks.
This fee is intended to compensate Chesters for the costs and damages associated with a franchisee's failure to properly de-brand and fulfill their financial obligations after the agreement ends. The payment is due via credit card or ACH transfer.
This requirement highlights the importance of franchisees understanding and adhering to the post-term obligations outlined in the franchise agreement. Failing to comply can result in significant financial penalties and further action from Chesters to ensure the brand is protected.