Which obligations of the Chesters franchise agreement survive its expiration or termination?
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 obligations are immediate and continuing). If you fail to comply with the payment and Restaurant-specific physical de-branding obligations within 30 business days, you must pay us a $10,000 fee. Payment is due by credit card or ACH transfer.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, several obligations continue even after the franchise agreement expires or is terminated. These include the franchisee's duty to immediately cease operating under the Chesters system and marks, and to refrain from representing themselves as a current or former licensee. Franchisees must also stop using any confidential methods, procedures, and techniques associated with the Chesters system and marks.
Additionally, franchisees are required to de-identify their restaurant from the Chesters system following the franchisor's instructions and timeframe. They must promptly pay all outstanding monies owed to Chesters and its affiliates and deliver all manuals, brochures, invoices, and other materials bearing the marks to Chesters at no cost to the franchisor. Franchisees have 30 business days to complete all payment and restaurant-specific physical de-branding obligations, with a $10,000 fee imposed for failure to comply within this period.
Chesters states that all obligations of the franchisee (and their owners) under the agreement that expressly or by their nature survive expiration or termination will remain in effect until fully satisfied or naturally expired. This ensures that certain critical aspects of the franchise relationship, particularly those related to brand protection and financial obligations, continue to be enforced even after the agreement itself has ended.