Does Chesters negotiate purchase agreements with suppliers for items described in Item 8?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not provide material benefits to you (for example, renewal or granting additional franchises) for purchasing particular products or services or using particular suppliers. We negotiate purchase agreements, including price terms, with suppliers for some items described in this Item 8 (shortening, breading supplies, frozen poultry, potato wedges, paper goods, packaging, and equipment). In doing so, we seek to promote the overall interests of our franchise system and our interests as the franchisor and not the interests of any particular franchisee. There are no purchasing or distribution cooperatives in our system.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Chesters does negotiate purchase agreements with suppliers for some of the items described in Item 8. These items include shortening, breading supplies, frozen poultry, potato wedges, paper goods, packaging, and equipment.
Chesters states that when negotiating these agreements, including price terms, it seeks to promote the overall interests of the franchise system and its own interests as the franchisor, rather than the interests of any particular franchisee. This means that while Chesters aims to secure favorable terms, the primary beneficiary is the franchise system as a whole, which may not always align with the specific needs or preferences of an individual franchisee.
Prospective franchisees should be aware that Chesters has the right to receive payments from suppliers based on their dealings with franchisees and can use these amounts without restriction. Additionally, franchisees are required to purchase food items, ingredients, equipment, and other items only from approved suppliers, and Chesters can restrict sources of trade secret and proprietary food products. These restrictions are in place to protect trade secrets, assure quality, ensure a reliable supply of products, achieve better purchase and delivery terms, control the use of the Marks, and monitor the manufacture, packaging, processing, and sale of these items.