What are all the obligations of a Chesters franchisee related to pre-opening, considering Items 5, 9, and 11?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in agreement | Disclosure document item | |
|---|---|---|---|
| a. | Site selection and acquisition/lease | Not Applicable | 11 and 12 |
| b. | Pre-opening purchases/leases | 5, 6, 8, 9, 10, and 16 of Agreement | 5, 7, and 8 |
| c. | Site development and other pre-opening requirements | 6 of Agreement | 7, 8, and 11 |
| d. | Initial and ongoing training | 4 and 7 of Agreement | 7 and 11 |
| e. | Opening | 6 of Agreement | 11 |
You must pay us a $3,500 training fee in a lump sum when you sign the Agreement. The training fee is not refundable under any circumstances. During the 2024 fiscal year, the training fees we received from franchisees ranged from $0 to $3,500.
Besides paying the training fee, you must buy various equipment, signage, fixtures, and product inventory before you open your Restaurant. The cost of all items available from us will depend on the Restaurant's anticipated venue and the items already in place. The expected range is $12,000 to $55,000 for a Restaurant to be located in a convenience store or similar retail business. You must have the core equipment to bread, fry, and merchandise CHESTER'S menu items. You may buy this equipment from us or use existing equipment we approve. You may buy certain proprietary food products and preparation supplies from unaffiliated suppliers. However, as described in Item 8, we have the right to require you to buy some or all of these items from designated exclusive sources, including us. None of the amounts you pay to us for any special order equipment is returnable and refundable, unless approved in advance by us. Special order equipment includes electric and/or gas powered cooking or food holding equipment, any custom signage, and other custom marketing materials. All other amounts paid to us for various equipment, signage, fixtures, and product inventory are refundable to you.
Before you open your Restaurant, we (and/or one of our Area Developers) will:
- Give you information about the Restaurant's layout requirements and signs. [Agreement — Section 6]
- Review and approve your plans and specifications for the Restaurant and conduct a restaurant-readiness review assessment. [Agreement — Section 6]
- Provide an initial brand standard training program (described below) to instruct you and your employees about required procedures and techniques to operate the Restaurant. [Agreement — Sections 4 and 7]
- Give you access to one copy of our confidential manuals (the "Manuals"). [Agreement — Section 13] The Manuals for a CHESTER'S Restaurant have 140 pages. The table of contents is in Exhibit C.
- Give you advice regarding operating the Restaurant and new developments, techniques, and improvements in areas of restaurant management, food preparation, sales promotion, and service. [Agreement — Section 4]
- Sell you equipment, signage, and various food items. (We deliver these items, or cause them to be delivered, but are not required to install anything.) [Agreement — Sections 5, 6, and 9]
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, franchisees have several obligations before opening their restaurant. These obligations span site selection, purchases, development, and training. Chesters franchisees must handle site selection and acquisition or leasing, as detailed in Items 11 and 12. They are also responsible for pre-opening purchases and leases, as outlined in Item 5, and Sections 6, 8, 9, 10, and 16 of the franchise agreement.
Chesters franchisees are obligated to manage site development and meet other pre-opening requirements, as specified in Section 6 of the agreement and Items 7, 8, and 11. Initial and ongoing training is another key obligation, covered in Sections 4 and 7 of the agreement and Items 7 and 11. Furthermore, franchisees must fulfill requirements related to opening the restaurant itself, as detailed in Section 6 of the agreement and Item 11. These pre-opening obligations ensure that the franchisee's restaurant is set up according to Chesters's standards and is ready for operation.
In addition to these obligations, Chesters requires franchisees to pay a $3,500 training fee upon signing the agreement, which is non-refundable. Franchisees must also purchase equipment, signage, fixtures, and product inventory before opening. The cost for these items, if purchased from Chesters, ranges from $12,000 to $55,000 for a restaurant located in a convenience store or similar retail business. This cost covers the core equipment needed to prepare and sell Chesters menu items. Franchisees can either buy this equipment from Chesters or use existing equipment that Chesters approves. However, Chesters retains the right to mandate that franchisees buy some or all of these items from designated exclusive sources, including Chesters itself.
Chesters also provides assistance to franchisees before they open their restaurant. Chesters will give franchisees information about the restaurant's layout requirements and signs, review and approve the restaurant's plans and specifications, and conduct a restaurant-readiness review assessment. Chesters will provide an initial brand standard training program to instruct franchisees and their employees on the procedures and techniques required to operate the restaurant. Franchisees will also receive access to one copy of Chesters's confidential manuals, which contain 140 pages. Additionally, Chesters will provide advice regarding operating the restaurant and new developments in areas of restaurant management, food preparation, sales promotion, and service. Finally, Chesters will sell franchisees equipment, signage, and various food items, but is not required to install anything.