What was the loss on distributor agreement termination for Chesters in 2024?

According to Chesters's 2025 Franchise Disclosure Document, the loss on distributor agreement termination for the year 2024 was $2,514,311. This figure is part of the 'Other Income (Expense)' section within Chesters's financial statements. In 2023, there was no reported loss on distributor agreement termination.

This loss likely stems from Chesters's strategic shift in its supply chain distribution. As the FDD notes, Chesters transitioned from handling distribution operations internally and, in May 2024, began contracting with third parties to manage the procurement and distribution of foodservice items and equipment for restaurant operations. This transition likely resulted in costs or losses associated with terminating previous distributor agreements.

For a prospective franchisee, this figure highlights the potential for significant one-time expenses related to strategic changes within the Chesters franchise system. While the move to third-party distribution may ultimately benefit franchisees through improved efficiency or cost savings, the initial transition period can create financial headwinds for the franchisor. It would be prudent for potential franchisees to inquire about the long-term impacts of this transition and how Chesters plans to mitigate any future losses related to similar strategic shifts.