If a Chesters franchisee is unable to fulfill their obligations due to an FME, what is Chesters obligated to do?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary herein, if you are unable fulfill your obligations in this Agreement herein due to an FME, we agree to engage in good faith discussions to come to a mutually acceptable resolution; provided that if 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.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, if a franchisee is unable to fulfill their obligations due to a Force Majeure Event (FME), Chesters is obligated to engage in good faith discussions to find a mutually acceptable resolution. This means Chesters must work with the franchisee to try and find a way for them to meet their obligations, considering the circumstances of the FME.
However, this obligation is limited. If Chesters and the franchisee cannot agree on a resolution within 45 days of starting these discussions, Chesters has the right to terminate the franchise agreement immediately. This clause protects Chesters from being indefinitely bound to a franchisee who cannot fulfill their obligations.
Furthermore, the FDD states that in no case may an FME last more than 180 days. This sets a firm limit on the duration of the excusable inability to fulfill obligations. After 180 days, regardless of ongoing discussions, Chesters can take action, presumably including termination, as the FME clause no longer applies. This is a fairly standard clause in franchise agreements, as franchisors need to ensure consistent operation and brand standards are maintained.